BuzzFeed is axing 12% of its workforce, or around 180 staffers, in a bid to cut costs as the digital media company faces headwinds including an ad-spending pullback and the completion of its integration of Complex Media.
The company informed affected employees via email Tuesday that they were being terminated. “In order for BuzzFeed to weather an economic downturn that I believe will extend well into 2023, we must adapt, invest in our strategy to serve our audience best, and readjust our cost structure,” CEO Jonah Peretti wrote in a memo to employees about the job cuts.
BuzzFeed disclosed the layoffs in an SEC filing Tuesday. The company said the layoffs are “intended to reduce the company’s costs” in response to factors including “challenging macroeconomic conditions,” completing the integration of Complex Media and “eliminating redundancies where they exist” and the ongoing audience shift to short-form, vertical video, which BuzzFeed is “still developing from a monetization standpoint.”
BuzzFeed went public a year ago, launching its IPO in December 2021 through a merger with a special-purpose acquisition company. As part of the SPAC deal, BuzzFeed acquired Complex Networks from Verizon and Hearst for $300 million. Prior to its IPO, BuzzFeed bought HuffPost from Verizon. At the end of 2021, BuzzFeed reported having 1,522 employees.
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For the third quarter of 2022, BuzzFeed reported a 15% increase in revenue, to $103.7 million, boosted by Complex Networks, while its net loss ballooned to $27.0 million compared with net loss of $3.6 million in the year-earlier period. “It is clear that advertisers are continuing to exercise caution around spending as a function of strong macroeconomic headwinds,” CFO Felicia DellaFortuna said on the earnings call in discussing expectations of a “seasonal lift” in Q4 revenue but one that would be “somewhat muted” relative to prior years. She also told analysts that BuzzFeed is “focused on further optimizing our cost base” to “preserve cash over the coming quarters.”
The bulk of BuzzFeed’s layoffs occurred Dec. 6, with only a few cases of severance extending into 2023, according to the company. Restructuring charges are anticipated to be between $8 million to $12 million, recognized primarily in the fourth quarter of 2022.
In March 2022, Peretti said the company would reduce the headcount at BuzzFeed News overall by 1.7% going forward as well as laying off members of the BuzzFeed video team, Complex Networks’ editorial staff, and employees on the business and administrative teams.
Read Peretti’s Dec. 6 memo to staffers:
I am writing to announce some very difficult changes today across the company. We are reducing our workforce by approximately 12% and letting many talented colleagues go.
If you are impacted by these changes, you will receive an email from Chandler Bondan in the next 5 minutes, including information and an FAQ that hopefully addresses many of your immediate questions. The notification will be followed by a calendar invite for a meeting in the next 36 hours with a manager and an HRBP.
I want all of you, but especially those that are receiving difficult news today, to know that these changes do not reflect on the good work that these employees have done over the years to build our company and our brands.
In order for BuzzFeed to weather an economic downturn that I believe will extend well into 2023, we must adapt, invest in our strategy to serve our audience best, and readjust our cost structure.
Our revenues are being impacted by a combination of worsening macroeconomic conditions, and the ongoing audience shift to vertical video, which is still developing from a monetization standpoint. That requires us to lower our costs. Unfortunately, reducing our workforce is an essential part of cost cutting. Staff salaries are the single largest cost at the company.
We are also completing the integration of Complex Networks. We’ve learned a lot through the first 11 months since Complex joined us, and see clear opportunities to consolidate and centralize some areas where we’ve had duplication. This will not affect the editorial independence of Complex or any of our brands.
The path I’m laying out today is the result of a deliberate and collaborative resource allocation review among the leadership team, which prioritizes:
- Investing in areas that will drive growth, and shifting away from areas with less audience engagement
- And, building a more robust creator business, which requires a close conduit between content, business, and tech, and bringing additional skills and tools to the organization
I know that there’s nothing I can write here to make this easier for anyone losing their job today. While I believe in the strategy we’re pursuing, and know it’s necessary to navigate the challenging year ahead, that’s no comfort if you are directly affected. So my focus today, which I know Chandler and the rest of our leadership team shares, is to give employees the respect and support they deserve as they exit the company.
I’m deeply grateful for everything that those impacted have contributed to our community and to BuzzFeed.
Jonah
