On Wednesday, HuffPost parent company BuzzFeed announced that it is cutting 16% of its workforce, joining other media firms facing financial challenges. It will sell the music and culture-focused site Complex as part of a restructuring that will save the firm around twenty-three million dollars annually.
BuzzFeed did not provide details on the number of cuts, but a source close to the New York-based company suggested that about 150 jobs would be cut.
Series of Layoffs in Buzzfeed as Part of Restructuring
The layoffs come about a year after Buzzfeed reduced staff by 15% and closed Buzzfeed News, a site known for its mix of listicles, viral cat videos, and hard news, and moved news content to HuffPost, which it bought in 2020.
BuzzFeed sold most of Complex Networks, a publisher focused on streetwear and pop culture, to Ntwrk, an e-commerce group, for one hundred eight million, six hundred thousand dollars two years after buying it for a two hundred ninety-four million deal. Five million, seven hundred thousand dollars is also allocated for office and severance expenses. BuzzFeed plans to retain First We Feast, known for its popular video series Hot Ones, and use the proceeds to improve its financial position and reduce debt.
Jonah Peretti, CEO of BuzzFeed, stated in a press release that selling Complex is a key strategic move for BuzzFeed, Inc. in reshaping the business to be more profitable, agile, and more inventive.
A New Phase for Buzzfeed
BuzzFeed's shares have been struggling since its one billion, five hundred million dollar deal to go public in 2021. Before Wednesday's announcement, its market value was only thirty-one million, five hundred thousand dollars. However, its shares surged by 130% during after-hours trading.
Peretti announced that the sale of Complex and job cuts mark a new phase for the company, as they focus on remaining brands like HuffPost, Hot Ones, and Tasty for a more efficient cost structure and operational model.
Less than a year ago, BuzzFeed closed its Pulitzer prize-winning news division, resulting in the layoff of many employees.
Downsizing the Business Due to Market Challenges
Those impacted by the layoffs will be informed next Wednesday, Peretti mentioned. In a memo to staff, he noted that digital publishers are encountering several challenges in today's market and that recent revenue outcomes indicate that the current advertiser and platform trends do not favor a bundled portfolio approach.
Peretti emphasized that their performance does not accurately represent their brands' value or future growth potential, stating that the changes being implemented to downsize their business and administrative teams will enable each brand to operate more independently.
The company expects to unveil the details of Wednesday's restructuring on Feb. 28, with anticipated annual cost savings of twenty-three million dollars. Chief financial officer Matt Omer alerted investors that fourth-quarter revenues are expected to fall between seventy-three million and seventy-eight million dollars, lower than the anticipated range of ninety-nine million dollars to one hundred ten million dollars projected in November.
Omer mentioned the reduced sponsorship revenues for the brand's main event, ComplexCon, attributing the decline to the event's uncertain future as it was being sold. He also pointed out the difficulties in delivering on their bundled advertising strategy in a more competitive digital advertising market.
Buzzfeed is reducing its workforce amidst a wave of layoffs across various publications like The Washington Post, The Los Angeles Times, Forbes, and Sports Illustrated.
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