BuzzFeed is slashing its workforce by 15% in a move to boost the internet-media company’s profitability and “focus on content that is working,” according to a memo from CEO Jonah Peretti sent to staffers Wednesday.
The cuts will be made next week, according to Peretti’s memo. BuzzFeed has about 1,450 employees worldwide, so around 218 will be getting laid off.
BuzzFeed, along with other digital-media players, has struggled to make ends meet as it tries to expand its business. The company relies on advertising for most of its revenue, and even though BuzzFeed boosted 2018 sales by “double digits,” according to Peretti, it hasn’t been able to swing into the black to a level of profitability expected by its shareholders.
“Over the past few months, we’ve done extensive work examining the trends in our business and the evolving economics of the digital platforms. We’ve developed a good understanding of where we can consolidate our teams, focus in on the content that is working, and achieve the right cost structure to support our multi-revenue model,” Peretti wrote in the memo. “We are confident the changes we are making will put us on a firm foundation and allow us to invest and grow sustainably for years to come.”
BuzzFeed previously pink-slipped 100 staffers in November 2017, with layoffs cutting across ad sales and business operations. Among other restructuring actions in recent years the company shut down its in-house podcast team last fall.
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BuzzFeed’s layoffs come after its BuzzFeed News division attracted headlines with an explosive report last week that Michael Cohen was instructed by Donald Trump to lie to Congress about negotiating with the Russian government about building a Trump Tower in Moscow. In a rare comment, Special Counsel Robert Mueller’s spokesman said that certain elements of BuzzFeed’s story weren’t accurate (but didn’t specify what the office was disputing).
NBCUniversal is among BuzzFeed’s backers, having invested $400 million in the company. According to Peretti, the planned 15% staff cuts next week will let it “control our own destiny, without ever needing to raise funding again.”
In an interview last fall with the New York Times, Peretti said he was open to merging with other digital-media companies, on the theory that a bigger entity would be able to get better economic terms for advertising from the likes of Facebook and Google. “If BuzzFeed and five of the other biggest companies were combined into a bigger digital media company, you would probably be able to get paid more money,” he said, citing Vice Media, Vox Media, Group Nine Media and Refinery29.
Read Peretti’s full memo sent to staffers:
I’m writing with sad news: we are doing layoffs at BuzzFeed next week. We will be making a 15% overall reduction in headcount across the company. I’m sending this tonight because I wanted you to hear it from me directly instead of from the press.
Over the past few months, we’ve done extensive work examining the trends in our business and the evolving economics of the digital platforms. We’ve developed a good understanding of where we can consolidate our teams, focus in on the content that is working, and achieve the right cost structure to support our multi-revenue model. We are confident the changes we are making will put us on a firm foundation and allow us to invest and grow sustainably for years to come.
I’m so proud of what our team accomplished over the last year, including diversifying our revenue, and growing our business double digits. Unfortunately, revenue growth by itself isn’t enough to be successful in the long run. The restructuring we are undertaking will reduce our costs and improve our operating model so we can thrive and control our own destiny, without ever needing to raise funding again. These changes will allow us to be the clear winner in the market as the economics of digital media continue to improve.
I’ll share more about our future structure in a few days, but today I want to focus on what will be a difficult week, especially for the people who are leaving the company. These are talented people, friends, and valued colleagues, who’ve made huge contributions to our success, and who’ve done nothing wrong. Even though I’m confident this is the right business decision, it is upsetting and disappointing.
On a personal note, I’ve never thought about my job as “just business.” I care about the people at BuzzFeed more than anything other than my family. This will be a tough week for all of us and I realize it will be much worse for the people losing their jobs. To them, I want to say thank you, I’m sorry our work together is ending this way, and I hope we get to work together again in the future. Our loss will be to the benefit of other organizations where I know you will go on to make formidable contributions.
We will be back to you with specifics on the process by Monday at the latest. Thank you all in advance for your compassion and kindness as we go through this process.