News Update

BuzzFeed News Division Shutting Down Amid Company’s 90% Valuation Drop and Profit Push

• ByStartupStory     |    April 21, 2023

BuzzFeed has announced that it will be closing down its well-regarded BuzzFeed News division, as part of its plan to revive the company and boost its financial performance. The decision comes in the wake of a sharp drop in the company’s valuation, which has fallen by 90% since its initial public offering in 2021.

BuzzFeed News, a reputable source of journalism in the industry and a recipient of several awards including a Pulitzer Prize, is being mourned by its employees and journalists alike as it shuts down. In a company-wide message, CEO Jonah Peretti has taken the blame for the failure of the news division, stating that excessive investment and an over-dependence on social media distribution were major contributing factors.

The company that owns BuzzFeed News, HuffPost, Complex, and Tasty is planning to reduce its staff by 15%, which will result in about 180 employees being affected. BuzzFeed News, which has approximately 60 employees, will be closed down immediately, and BuzzFeed and HuffPost will offer some of the impacted workers new positions. Going forward, HuffPost will be the sole news brand for the company, as it has a devoted direct front-page audience and is profitable.

BuzzFeed’s decline serves as a cautionary tale for other digital media companies and underscores the challenges they face in generating revenue and controlling expenses. Once a popular player in the digital media landscape, BuzzFeed’s choice to go public through a special purpose acquisition company (SPAC) in 2021 and its acquisition of Complex Networks have contributed to its downfall. While it was valued at more than $700 million during its listing, its market value has since plummeted to approximately $100 million.

The news of BuzzFeed’s closure comes amidst a wave of widespread job reductions in the media industry over the past year, including several rounds of layoffs at BuzzFeed and Insider’s decision to cut 10% of its staff on the same day. The shutting down of BuzzFeed News has been mourned by current and former employees on social media, who have praised the outlet’s excellent journalism and expressed sadness over its demise.

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