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BuzzFeed to cut 15% of staff in new round of layoffs

Posted: 7:03 PM, Jan 23, 2019
Updated: 2019-01-23 19:03:25-05

BuzzFeed is preparing to announce a significant round of layoffs, according to sources familiar with the matter.

The coming contraction is the latest example of digital media companies having to make cutbacks in a difficult operating environment.

One of the sources said the layoffs will affect 15% of the company's workforce. The reductions will involve multiple departments, including the news division.

Staffers have been bracing for bad news for days. Employees had learned senior editors were being flown into BuzzFeed's New York City offices and cuts to staff were widely speculated about internally.

BuzzFeed has about 1,450 employees, so about 220 will be leaving, the source confirmed.

The company has not yet announced the layoff internally, but is expected to do so on Wednesday evening.

The layoffs come during a turbulent time in digital media, and the journalism industry as a whole. Verizon announced on Wednesday that it would cut 7% of staff from its media division which is comprised of brands that include Yahoo, AOL, and HuffPost. Layoffs also hit Gannett, the nation's largest newspaper chain, on Wednesday.

Companies have struggled in recent years amid declining advertising revenue that has been eaten up by technological giants like Facebook and Google. Some news organizations have also been impacted by dwindling web referrals from Facebook, which altered its algorithm in 2016 to favor user-generated content after having once served as a firehose of traffic for publishers.

Additionally, as media companies have tried to weather the storm wreaking havoc on the industry, they have been under increasing pressure from venture capitalists, who have provided sizable rounds of funding, to deliver results.

BuzzFeed hasn't been immune to such challenges.

There was a small round of layoffs in September 2018 when BuzzFeed shuttered its podcasting division.

A few months prior to that, in June 2018, BuzzFeed cut 20 staffers as it reorganized its business operations. And in November 2017, BuzzFeed laid off laid off approximately 100 employees -- a move that hit sales and marketing, along with staffers in the British news and business teams.

BuzzFeed has responded to the troubled digital news environment by trying to diversify its revenue stream. Late last year, the news organization finally started running traditional banner ads, which it had long avoided. It has also started selling memberships to its website, offering subscribers exclusive content.

Jonah Peretti, the founder and chief executive of BuzzFeed, floated the idea of digital companies merging with each other to gain better leverage over Facebook and Google and strike better advertising deals.

"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," Peretti told The New York Times in an interview last November.

At the time, Peretti mentioned Group Nine Media, Vice, and Vox Media as companies he viewed as "doing interesting work."

Peretti has spoken to Benjamin Lerer, the chief executive of Group Nine Media, about a possible deal, but the talks are no longer active, a person familiar with the matter told CNN Business.

Group Nine Media, which formed in 2016, is the parent company of NowThis, Thrillist, The Dodo, and Seeker. The company, whose investors include Discovery and Axel Springer, recently raised an additional $40 million in funding.