Henry Blodget On Business Insider Layoffs: ‘The Market Has Changed’

Following the announcement that Business Insider would lay off 21% of its staff, a move driven largely by Google’s AI-centric search changes, I reached out to one particular Substack writer in an effort to get his take on the news: Henry Blodget, whose newly launched Regenerator newsletter aims to “analyze the most important questions in tech and innovation.” The same Henry Blodget, of course, who co-founded Business Insider in 2007.

“I was very sad to see the BI news,” Blodget, who was the outlet’s CEO from its founding through 2023, told me in an email. “They’re a great team and great people, and it’s really tough.”

Tough is exactly how Business Insider CEO Barbara Peng described the situation facing the Axel Springer–owned business and tech news site this week in a company-wide memo, detailing the third major round of layoffs in the last few years. In it, she outlined the harsh realities facing not only her company, but digital media at large. “The media industry,” she notes at one point, “is at a crossroads. Business models are under pressure, distribution is unstable, and competition for attention is fiercer than ever.”

Seventy percent of Business Insider’s output, the memo continues, “has some degree of traffic sensitivity. We must be structured to endure extreme traffic drops outside of our control, so we’re reducing our overall company to a size where we can absorb that volatility.”

Journalism in the AI era

The company’s union laid the blame for what happened at the feet of “strategic failures” on the part of management, which is currently grappling (as are news companies pretty much across the board) with a turn of events that media writer Dylan Byers has described as a potential “meteorite-level euthanizing event” for the industry:

Essentially, Business Insider anchored its distribution strategy in large part around search and social. But now, as Big Tech pulls up the drawbridge on outbound traffic, news publishers that once relied on that steady stream of monetizable visitors are scrambling to rewrite their entire playbook. Google, in particular, has begun presenting AI-generated summaries directly on the search results page, allowing users to get information without ever leaving Google.

It’s a shift that, for publishers, threatens the very clicks that once sustained their business.

Some observers see in Google’s latest moves nothing short of an existential threat to the open web — and, by extension, to digital journalism. But Blodget, who led Business Insider when it was still a scrappy, voice-y upstart during the Web 2.0 era, isn’t ready to concede that point just yet.

“Journalism is not screwed,” he stressed to me. “People will always want to know what’s happening and what it means — and we will always need great (human) journalists and publications to provide that. But the market has changed radically in the last five years. After 30 years of growth, digital media is now mature. Within it, distribution is getting disrupted — yes, Google, but also Facebook, Twitter, and others. And advertising is shifting to platforms.”

So, what should news companies be betting on? “Direct distribution and subscriptions. That model will support thousands of excellent publications, big and small. And audio and video are still growing as we move from TV/radio to digital.”

In other words, he’s imagining a media landscape populated by smaller, more focused, and often subscription-driven outlets — the kind built to serve a loyal following rather than chase clicks from the drive-by crowd. A vision that, in many ways, reflects the polar opposite of what Business Insider was in its early days, when it was aggregation-heavy, engineered for virality, and almost entirely free to read.

As an aside: I actually caught a glimpse of the company back then first-hand, albeit very briefly. It was when Business Insider still operated out of the Gramercy Park building in Manhattan, and I met up with an editor there the day before Facebook went public in 2012 (my byline is also on a few freelanced posts from that period).

When I stepped off the elevator and made my way into the newsroom, the first sound I heard was the telltale clop-clop of a ping-pong game. The newsroom itself reminded me of a financial trading floor, with a low hum of chatter emanating from writers who sat shoulder-to-shoulder behind rows of computers. I caught a glimpse of a very animated Blodget in what looked like a conference room, giving off the appearance of some sort of hyper-caffeinated analyst who’s convinced he’s spotted a market bubble.

What AI still can’t do well

Three years after my visit, Axel Springer would pay $343 million to acquire most of Business Insider. For context, that’s more than the mere quarter of a billion dollars that Jeff Bezos forked over for control of The Washington Post in 2013.

To a wide-eyed visitor like myself, there was something that felt both rebellious and inevitable about Blodget’s operation. Sort of like how some people today feel there’s no stopping LLMs from making a generation of journalists obsolete. Blodget, for his part, isn’t one of them — nor is Steven Zeitchik, a veteran of The Washington Post and LA Times who now writes the Substack-based Mind and Iron newsletter.

You can argue that, to a certain extent, they’re correct. Notwithstanding the retrenchment under way at publishers like Business Insider, there are still some journalistic tasks that machines can’t do well — the workflows being too messy and unpredictable. “As AI gobbles up from the bottom like some kind of Stephen King monster,” Zeitchik wrote on Friday, “journalists can avoid its hungry teeth in two ways: by getting so good at the writing part an LLM can’t touch you (but do you really want to get into a footrace with AI?) or hopping off that vine onto one it’s not even climbing, like in-person or real-time reporting.”

In other words, maybe journalism can win its race against the machines by running in the opposite direction — back to the basics. Or, as one Redditor put it in a thread about the Business Insider layoffs: “…the real punk move today is rejecting the internet entirely. Ditching the algorithm, stepping off social media, and reclaiming reality. Because at this point, nothing’s more radical than being human on purpose.”