BuzzFeed (BZFD) is shutting down its news division as part of wider company layoffs.
According to an internal memo obtained by Yahoo Finance, the company said the shutdown is part of layoffs that will impact 15% of staffers, or about 180 employees, in order to make the business “more agile and focused.” As part of that effort, the company will also be reducing budgets, open roles, real estate, and most other non-revenue generating expenditures.
“While layoffs are occurring across nearly every division, we’ve determined that the company can no longer continue to fund BuzzFeed News as a standalone organization,” BuzzFeed CEO Jonah Peretti wrote in a memo to employees, explaining the company will now concentrate its news efforts in HuffPost.
Peretti had been a long-standing champion of BuzzFeed News, explaining he made the decision to over-invest in the division “because I love their work and mission so much,” he wrote in the memo.
“This made me slow to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium, free journalism purpose-build for social media,” he continued, adding: “Please know that we exhausted many other cost savings measures to preserve as many jobs as possible.”
Peretti said he regrets not holding the company to a higher standard for profitability, especially amid industry downturns and economic uncertainty. He admitted he could have better managed those challenges as CEO and the leadership team could have performed better.
“I’ve learned from these mistakes, and the team moving forward has learned from them as well,” Peretti said. “We know that the changes and improvements we are making today are necessary steps to building a better future.”
CNBC reported last year that the news organization lost roughly $10 million a year as shareholders had been pressuring the company to shut down the news division.
BuzzFeed was halted for volatility in midday trading on Thursday after the stock sank as much as 26%.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at [email protected]
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Source: https://finance.yahoo.com/news/buzzfeed-shuts-down-news-division-amid-wider-layoffs-155140289.html