When BuzzFeed (BZFD) burst onto the internet back in 2006, it had such a major impact on the landscape that it changed the language of new media permanently.
Known at first for its millennial focus and pop culture-fueled "listicles," the brand's explosive growth left a unique footprint on the web. It's offices sang with canary yellow walls, vivid red chairs, and meme-inspired decor. All of the sudden, every writer hoped to one day work at BuzzFeed.
The brand evolved over time with its award-winning reporting via BuzzFeed News, seeming to shine brighter as it moved forward. And after 15 years in business, BuzzFeed announced it was going public in 2021, which seemed to symbolize that even brighter days were on the horizon for the media brand.
Listening in on social media, however, some told a different story. For some, working for BuzzFeed was not the dream they imagined it would be. Some chose to go public about it, making YouTube videos about their experiences.
And then in 2019, BuzzFeed laid off of 15% of its staff, with BuzzFeed Chief Executive Jonah Peretti announcing in a memo to staff that the company planned to restructure to improve its operating model.
Now, two years later, more cuts have been announced, and they could threaten the brand in a way it's never had to face before.
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What's Happening at BuzzFeed, And Why?
During BuzzFeed's first earnings call Tuesday, founder Jonah Peretti said that the company planned to make cuts to its staff to boost profitability for its news division.
BuzzFeed Editor-in-Chief Mark Schoofs also announced his upcoming resignation in an email to staff Tuesday, mentioning that in order for BuzzFeed to reach its next phase of growth, it would "require BuzzFeed News to shrink in size."
Schoofs also said BuzzFeed sought to reduce head count through voluntary buyouts rather than layoffs, which suggests he may have taken that deal himself. Executive Editor Samantha Henig will serve as interim Editor-in-Chief until BuzzFeed finds a new person to fill the role.
Tom Namako, deputy editor-in-chief, and Ariel Kaminer, executive editor of investigations, are also leaving the company. Namako announced on Twitter that he has accepted a role as the new executive editor for NBC News.
While Buzzfeed reported a 24% revenue growth year over year and $600 million earned via commerce content, calling 2021 "a year of significant milestones," it also said it expected a "low single-digit percentage" revenue decline in Q1.
BuzzFeed's stock had somewhat of a rocky start on its first day of trading. But despite some ups and downs today, its stock is up for now (3.8% at the time of this writing).
BuzzFeed's Ongoing Struggle to Stay Profitable
The internet media industry has been a rocky boat on a stormy sea for some time now, but the pandemic battered its already thin defenses, leading to major outlets either furloughing employees or letting them go altogether.
BuzzFeed was affected in 2020 as well, first furloughing 74 employees and then eliminating 50 of their jobs altogether. The BuzzFeed News Union also tweeted that they would have to take a 20% pay cut and work 20% less, although at that time still having a job was a much better option than having none.
Then, after buying HuffPost in February 2021, only three weeks later Peretti announced that HuffPost Canada would be shuttered and 47 U.S. employees cut, also saying that HuffPost's 2020 losses exceeded $20 million.
The company is wrestling with other problems as well. On March 15, the New York Times reported that employee complaints had been filed to the American Arbitration Association accusing BuzzFeed of poor execution of its IPO.
Close to 80 employees say that BuzzFeed did not properly instruct them on how to trade their shares, and they were not able to trade them until the price had dropped 60%. They are seeking compensatory damages estimated at more than $8.7 million.
