BuzzFeed, once a darling of digital media, has announced the closure of its news division, alongside plans to reduce its workforce by around 15%. CEO Jonah Peretti revealed the cutbacks in a memo to staff yesterday, citing the news division's unprofitability and the wider industry slowdown.
Which BuzzFeed are you today?
Founded in 2006, BuzzFeed built its name on lighthearted content and viral quizzes. The company expanded into serious journalism in 2012 with the launch of BuzzFeed News, which went on to win a Pulitzer Prize for investigative work into China’s mass detention of Muslims. However, even with some award-winning scoops, the news division failed to turn a profit, racking up losses of around $10 million per year.
In 2021, BuzzFeed went public via a SPAC at a billion-dollar-plus valuation, a figure already below its 2016 peak private valuation of $1.7bn — an early sign of things to come.In only its first week of trading, the shares fell by more than one-third and have never fully recovered. Less predictable traffic from social media, slowing advertising revenue, an exodus in the newsroom, and forecasts that were — frankly — just too optimistic, left BuzzFeed’s shares with few willing buyers, sending its market cap down to just ~$100m.
Despite shutting its UK and Australian offices, laying off 12% of staff in December, and this latest round of cost-cutting measures, BuzzFeed has failed to stem its losses. The company even turned to AI to write articles and, while this caused a short term price jump, it hasn't been enough to save the sinking ship.
