DECEMBER 7, 2022 — 180 EMPLOYEES TARGETED IN COST-SAVING INITIATIVE
The company has announced plans to cut 12% of its workforce, or around 180 staffers, in a cost-cutting initiative.
According to CEO Jonah Peretti …
I am writing to announce some very difficult changes today across the company. We are reducing our workforce by approximately 12% and letting many talented colleagues go.
I want all of you, but especially those that are receiving difficult news today, to know that these changes do not reflect on the good work that these employees have done over the years to build our company and our brands.
In order for BuzzFeed to weather an economic downturn that I believe will extend well into 2023, we must adapt, invest in our strategy to serve our audience best, and readjust our cost structure.
Our revenues are being impacted by a combination of worsening macroeconomic conditions, and the ongoing audience shifts to vertical video, which is still developing from a monetization standpoint. That requires us to lower our costs. Unfortunately, reducing our workforce is an essential part of cost-cutting. Staff salaries are the single largest cost at the company.
We are also completing the integration of Complex Networks. We’ve learned a lot through the first 11 months since Complex joined us, and see clear opportunities to consolidate and centralize some areas where we’ve had duplication. This will not affect the editorial independence of Complex or any of our brands.
The path I’m laying out today is the result of a deliberate and collaborative resource allocation review among the leadership team, which prioritizes:
Investing in areas that will drive growth, and shifting away from areas with less audience engagement
And, building a more robust creator business, which requires a close conduit between content, business, and tech, and bringing additional skills and tools to the organization
I know that there’s nothing I can write here to make this easier for anyone losing their job today. While I believe in the strategy we’re pursuing, and know it’s necessary to navigate the challenging year ahead, that’s no comfort if you are directly affected. So my focus today, which I know Chandler and the rest of our leadership team shares, is to give employees the respect and support they deserve as they exit the company.
DECEMBER 1, 2017— Original post…
To compensate for a “significant revenue shortfall,” BuzzFeed has announced that the company would be laying off approximately 100 employees and restructuring the organization in an effort to diversify its revenue sources away from a reliance on so-called “native advertising.
For those unfamiliar with the concept of “native advertising,” it generally means customizing advertising into what appears to be a “native” editorial – or as they say “advertorial” – format which is both time-consuming, labor-intensive, and costly to produce. As people learn to distrust advertorial content and advertisers see less of an advantage over conventional advertising, it is natural for revenues to decrease with no offset to labor costs. Hence, employee headcount must be reduced.
BuzzFeed’s IPO (Initial Public Offering) scheduled for 2018 is also being placed on hold as the company deals with the risks associated with the hyper-politicization of their content, the ongoing era of digital disruption, and the widespread availability of real-time news and coverage on social media platforms. It should come as no surprise that BuzzFeed’s President, Greg Coleman, and a number of other executives will be leaving the company. Possibly at the urging of one of BuzzFeed’s major investors, Comcast Corp.’s NBCUniversal, who reportedly ponied up $400 million out of the $500 million invested by venture capitalists.
The greatest threat facing BuzzFeed is not diminishing advertising revenue or the risk of diversification into vertical markets, but the type of libel lawsuit that destroyed Gawker, another internet media company.
BuzzFeed was the first media organization to publish the salacious and mostly unverifiable “Steele Dossier” and the attempt to create a Trump-Russia linkage. It now appears that the dossier is a product of Fusion GPS an opposition research company founded by former Wall Street Journal reporters and was paid for jointly by the Clinton campaign and the Democrat National Committee.
The dossier is the subject of a libel suit filed by Russian entrepreneur Aleksej Gubarev, the CEO of XBT Holdings and its internet hosting network Webzilla. The dossier appears to allege that Gubarev was a party to the hacking of DNC computers under the direction of the FSB, Russia’s intelligence agency. Not only did Gubarev deny the allegations, he brought lawsuits against the purported dossier’s author, the ex-British spy Christopher Steele.
BuzzFeed has asked the Department of Justice to consider the publishing of this possibly false and defamatory document and the accompanying BuzzFeed story to be within the scope of free and protected speech. The BuzzFeed claim is based on the “fair reporting privilege” because the dossier was being investigated by the FBI. It is unknown at this time whether or not BuzzFeed was compensated for publishing the dossier after a number of credible media organizations turned away from the project. The DOJ has rejected BuzzFeed’s claim for immunity on the basis that their story did not mention the FBI, the investigation, and the dossier was not a government-originated document.
It is expected that other lawsuits remain waiting to be filed once the preliminary information has been discovered and key initial rulings published.
Is the handwriting on the wall and are red flags flying for the remaining employees?
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. We see good people being laid off through no fault of their own. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?