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BuzzFeed is laying off 15 percent of its workforce, about 215 people, sources tell The Hollywood Reporter.
CEO Jonah Peretti on Wednesday sent a memo to staffers with the subject line “Difficult Changes” in which he explained that efforts to diversify revenue weren’t enough to help the company achieve profitability.
“Unfortunately, revenue growth by itself isn’t enough to be successful in the long run,” he wrote. “The restructuring we are undertaking will reduce our costs and improve our operating model so we can thrive and control our destiny, without ever need to raise funding again.”
The cuts, expected to be company-wide, are set to take place next week. The staff reductions will give BuzzFeed a faster path to profitability, a spokesperson said.
“Rumors started flying” about the layoffs on Tuesday in the company’s New York and Washington, D.C.-based offices. “Lots of people are talking about it,” said an employee on the basis of anonymity. About 1,450 staffers work at BuzzFeed.
In the memo, Peretti noted that he’s “never thought about my job as ‘just business.’ I care about the people at BuzzFeed more than anything other than my family. This will be a tough week for all of us and I realize it will be much worse for the people losing their jobs.” The exec added that he was sorry to the people who would be let go.
BuzzFeed employees are not new to the cost-cutting process, but reporters and editors in the U.S. and at BuzzFeed News have largely been spared from previous rounds of cuts. The news division is expected to be impacted by the cuts but isn’t the division most affected.
BuzzFeed parted ways with about 100 employees in November 2017, which Peretti positioned as an evolution of the company, though those affected worked mostly in advertising sales and business operations.
“Our business is more diverse and balanced than it was a year ago and, very importantly, for the first time a quarter of our annual revenue will come from sources other than direct sold advertising,” Peretti wrote in a memo to staff at the time.
BuzzFeed News, which launched in earnest when the company poached editor-in-chief Ben Smith from Politico in 2012, regularly produces reporting on par with much larger news organizations, such as a Jan. 17 scoop about President Donald Trump and his former fixer Michael Cohen that upended the media-political ecosystem for several days and led to the office of the special counsel issuing a rare statement denying an aspect of the story.
But, newsgathering is not generally profitable, and the company has not followed legacy media competitors in putting reporting behind a paywall. Instead, the company has sought to tap different sources of consumer revenue, including a paid membership program that launched in November.
“We’ve had years when we’ve been profitable, and years when we’re not profitable,” Peretti said on an industry podcast last July. “On years, when we’re profitable, we haven’t said we’re profitable. We’ve proven we can be profitable. I feel good about where our business is now.”
He added, “Sometimes, it’s not smart to focus on profitability. Right now, we’re focused on sustainable growth so we’re innovating, managing our costs in a more rigorous way and we’re growing our top line in double-digit growth.”
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