MARCH 22, 2022 — LAYOFFS LOOM
Additional troubles at Buzzfeed portent a new round of layoffs as activist investors lobby to shutter its money-losing news operation.
BuzzFeed CEO Jonah Peretti, in a memo to employees, “BuzzFeed News will need to get smaller.” with the company planning to reduce headcount overall by 1.7% going forward.
JANUARY 24, 2019 — RESTRUCTURING AGAIN…
New York City, New York-based BuzzFeed, a digital news and entertainment publishing company, has announced that they will be restructuring and reducing their headcount by 15-percent, or up to 250 employees.
According to BuzzFeed CEO, Jonah Peretti, “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.”
There is no doubt that the company has been exploring alternative options in content licensing, e-commerce, and other ventures that could extend its digital advertising platform.
Since the company has received major capital infusions by media companies like NBCUniversal and prominent venture capital firms such as Andreessen Horowitz, Lerer Hippeau Ventures, New Enterprise Associates, RRE Ventures, and Hearst Ventures, there is significant pressure on senior management to perform or be removed.
Look for Buzzfeed to come under increasing scrutiny since its news division released allegations that President Trump may have suborned perjury in instructing his then-counsel Michael Cohen to lie to Congress about a proposed project in Russia. The article cites anonymous sources who have reviewed relevant documents and testimony. The revelation of this information may involve various prosecutable crimes and if found to be untrue, could impact BuzzFeed’s credibility and value as a potential merger candidate. Unfortunately, the Special Counsel overseeing the matter took the highly unusual step of publicly disputing BuzzFeed’s accuracy in their reporting.
Rinse and repeat. This is not the first time BuzzFeed engaged in mass layoffs or was involved with questionable reporting.
Since BuzzFeed significantly relies on mercurial and mutable social media, the is a built-in risk factor in moving forward with their listicles, videos, and other advertising-connected content.
Here is Peretti’s BuzzFeed memo that appeared with the subject line “Difficult Changes” …
Hello BuzzFeeders,
“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.”
DECEMBER 1, 2017 — Original post on restructuring
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 its 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. 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?
