BuzzFeed, still hoping to avoid layoffs during the economic downturn caused by COVID-19, will furlough 68 staffers without pay starting next week through mid-August. Among other cost-cutting steps, the digital-media firm also will extend previously enacted scaled salary reductions through the end of the year.
CEO Jonah Peretti announced the furloughs in a memo Wednesday to BuzzFeed employees, a copy of which was obtained by Variety. He said the company is hoping to hold losses to under $20 million for the year, after the drop-off in revenue in recent weeks has been even bigger than anticipated.
“I’ve made the very difficult decision to furlough 68 employees beginning May 16th. In the U.S., the furlough will last for 3 months,” wrote Peretti, who has said he is forgoing a salary during the coronavirus pandemic. “During this period, these employees won’t work and won’t be paid.”
For now, BuzzFeed News has not be targeted for furloughs but a source familiar with the situation says there will “definitely” be furloughs in the division. Peretti wrote in the memo that the company will start negotiations with NewsGuild of New York — the union that represents BuzzFeed News workers — “about the need to reduce costs in News.”
“While we weren’t planning for [BuzzFeed] News to be profitable, we were hoping to minimize losses this year and increase our efforts at monetization,” the CEO’s memo said. “Unfortunately given the current crisis, that will no longer be possible without further cuts similar to what we’re doing across other parts of the company.”
Among other digital-media companies, Vox Media is furloughing about 100 employees without pay for a three-month period and making other cuts including tiered salary reductions for remaining working staff and halting 401(k) matching contributions.
BuzzFeed will continue to provide health care coverage for furloughed employees, who also will be eligible to collect unemployment and other government assistance. In addition, the company will “pay out all accrued unused vacation days to furloughed U.S. employees with the next payroll which will provide extra cash to most impacted employees,” Peretti said in the memo.
Internationally, BuzzFeed also will be furloughing employees in some markets. “The duration of those furloughs and the payment of accrued vacation will vary depending on local regulations and benefits programs,” Peretti wrote.
The employees being furloughed include those in BuzzFeed’s business organizations in the U.S. and the U.K., as well as across the supporting admin group, and the BuzzFeed Studio team, which is supporting a smaller slate of projects. According to Peretti, the remaining Studio team will be integrated into BuzzFeed’s larger content organization, along with BuzzFeed’s Eko, Media Labs and Animation teams.
Other steps BuzzFeed is looking at to curtail costs include the possible suspension of its 401(k) matching programs through the end of the year and subleasing its Minneapolis and Washington, D.C., offices. In addition, it has effectively frozen hiring by canceling 50 open positions in the content and tech groups.
Separately, on Tuesday, BuzzFeed News named veteran journalist Mark Schoofs its new editor-in-chief, replacing Ben Smith, who exited earlier this year to joint the New York Times. Schoofs will continue to work as a professor at the USC Annenberg School for Communication and Journalism.