Chief executive Jonah Peretti admitted the decisions were “deeply painful” but said he could no longer invest in the unprofitable news site. Instead, the company will focus on providing news through the HuffPost website, which Buzzfeed took over in 2020.
On the news front, BuzzFeed isn’t doing well, which is why the company has laid off about 120 employees who were involved in news operations, including the chief revenue officer and chief operating officer. This was the first sign that the firm was in significant decline. In fact, this alarm bell has been going on for some time at BuzzFeed, and in the digital media industry.
When BuzzFeed was on the rise from 2014 to 2016, founder and chief executive Jonah Peretti used to talk about his company as if it were a technology company, not a traditional media company. This was done so that it could get investment from venture capitalists such as Andreessen Horowitz, which has traditionally avoided media companies but invested $50 million in BuzzFeed in 2014.
BuzzFeed shares have fallen significantly, so that if they were worth $1, now their price has fallen by another 20 percent.
BuzzFeed is currently valued at about $100 million, which is far less than the $437 million in revenue it generated last year. That’s even further from the top-10 valuations it got when it was just starting out: $850 million in 2014 and $1.5 billion a year later. Jonah Peretti, the news portal’s founder, managed to find a way to inadvertently increase the company’s value, he says, earlier this year when he announced that BuzzFeed would start using artificial intelligence to create content, but this was short lived. Today’s layoff announcement included a point stating that “no jobs are being replaced by AI.”
Going forward, we will have a single news brand through HuffPost that is profitable, with a loyal audience direct from the home page.
By John Peretti, Director of BeezFeed News
Other highly successful digital media companies that have been on the same page as BuzzFeed have had a similar evolution. Vice Media, once worth a theoretical $6 billion, has failed to find a buyer and its top executives have either left or been fired.
The advertising market is very weak at the moment, but even when it recovers, the trends will still be in favor of Google and Meta and against everyone who does not have this mega-scale.
