BuzzFeed News Shutting Down

Topline

BuzzFeed News, a pioneer of the digital news landscape over the past decade, will shut down, the company’s CEO said in a memo to staff Thursday morning, noting the business model of news tailored for social media had become too difficult to sustain, and the company will focus its efforts on the profitable Huffington Post going forward.

BuzzFeed CEO Jonah Peretti told employees Thursday the online news site is shutting down.

Getty Images for BuzzFeed Inc.

Key Facts

BuzzFeed CEO Jonah Peretti sent a memo to employees saying the company is “beginning the process of closing BuzzFeed News” and reducing the rest of the firm’s workforce, which includes news website Huffington Post, by 15%—the memo was first shared on Twitter by New York Times reporter Ben Mullin.

Buzzfeed News, which won a Pulitzer Prize for international reporting in 2021, is being shuttered due to revenue problems, Peretti explained, saying he “overinvested” in BuzzFeed News even though the site didn’t have the “financial support required to support premium, free journalism.”

Peretti also cited the pandemic, a recession in the tech industry, a declining stock market and decelerating digital advertising as challenges that led to the decision, though he also said he had regrets about decisions he had made that led to the publication’s closure.

BuzzFeed will continue to operate as a media organization, and will focus its news efforts on the Huffington Post, which Peretti says is profitable thanks to a loyal audience.

Along with layoffs and BuzzFeed’s termination, Peretti said the firm has reduced budgets, open roles, travel and “most other discretionary, non-revenue generating expenditures,” including its real estate footprints in New York City and Los Angeles.

Forbes reached out to BuzzFeed for comment.

Tangent

BuzzFeed is the latest media company to make major cuts as the industry faces falling revenue and layoffs across the board. Insider Inc., formerly known as Business Insider, announced Thursday it will cut roughly 10% of its staff, following other recent announcements from ABC News, NPR and USA Today parent Gannett. Newspapers are facing higher distribution and labor costs in the wake of the pandemic, while live broadcast journalism faces pressure from streaming services. There are also fears of a recession, which historically cuts into digital ads, a major source of revenue for many media companies.

Key Background

BuzzFeed News began as its own division in 2011 and broke off from a section on BuzzFeed.com to its own site domain in 2018. The site is known for a number of high-profile stories, including its coverage of China’s campaign against the Uyghurs, which won the Pulitzer Prize in 2021. It also broke major stories about about sexual assault allegations against actor Kevin Spacey and abuses of power in the investment arbitration system, and in early 2017, it controversially published a memo by former British spy Christopher Steele containing unconfirmed claims about then-President-elect Donald Trump. But over the past five years, BuzzFeed has cut down on operations, laying off 15% of its workforce in 2019 and shutting down its Australia and U.K. operations in 2020. In 2021, the company went public by merging with a special-purpose acquisition company, making it one of the first digital media firms to enter the public markets. However, the company’s share price fell from $9 to $6 on the first day following the merger and has continued to fall since then, currently trading at $0.75. In March 2022, BuzzFeed News Editor in Chief Mark Schoofs, who joined the organization from ProPublica in 2013, announced he was resigning and warned the organization would have to shrink in order to remain profitable in 2023. Executive Editor Ariel Kaminer also left at that time, and approximately half of the staff’s 100 reporters were offered buyout deals, according to reports.

Surprising Fact

BuzzFeed acquired pop culture media firm Complex Networks for $300 million in 2021. In his internal memo, Peretti said the integration process of BuzzFeed and Complex “should have been executed faster and better,” and had the potential to generate “much more” revenue in the past 12 months than the roughly $437 million the combined company earned in 2022.

What To Watch For

This year, BuzzFeed has gained some attention for its investment in artificial intelligence, which Peretti said in Thursday’s memo he intended to continue ramping up. The company began rolling out AI-written content in February and Peretti has said he hopes to transform the company into the “premier platform for AI-powered content.” His most recent memo promised to bring AI to “every aspect of our sales process.”