BuzzFeed has announced plans to lay off hundreds of staff, as digital media firms struggle to turn a profit while dealing with the same financial issues that have plagued traditional publishers for years.
Jonah Peretti, BuzzFeed’s founder, said about 200 staff would be leaving, while in a separate announcement Verizon Media Group – the owner of HuffPost, Yahoo, and AOL – said it would sack about 800 employees.
The cuts will affect BuzzFeed’s news operations, which had largely been insulated from previous rounds of redundancies. Earlier this week the site published a bombshell report claiming President Trump ordered his personal lawyer Michael Cohen to lie to Congress about the construction of a Moscow skyscraper and last year made the shortlist for a Pulitzer award.
It is unclear whether the BuzzFeed cuts will affect the UK arm of the company, which was founded in 2013, and laid off a third of its editorial staff in cuts last year. The UK editor-in-chief, Janine Gibson, left the company at the end of last week.
Peretti told BuzzFeed staff in an email that revenue was growing but it now needed to cut costs to secure its financial future, with the aim of never having to raise outside funding again. BuzzFeed has raised hundreds of millions from investors over the past decade, with the most recent investment valuing $1.6bn (£1.2bn).
Since then, the market has cooled on media investments, with some financial backers of new media companies concerned by the firesales of sites such as Mashable and Mic. Vice has also announced plans to reduce its workforce, with many new media sites also hit by changes to Facebook’s algorithm.
“These changes will allow us to be the clear winner in the market as the economics of digital media continue to improve,” said Peretti, announcing the 15% reduction in staff levels. He promised to tell staff whether they would be affected by Monday and said the company had been working to diversify its revenue away from online advertising.
Peretti added: “On a personal note, I’ve never thought about my job as ‘just business.’ I care about the people at BuzzFeed more than anything other than my family. This will be a tough week for all of us and I realise it will be much worse for the people losing their jobs. To them, I want to say thank you. I’m sorry our work together is ending this way, and I hope we get to work together again in the future. Our loss will be to the benefit of other organisations, where I know you will go on to make formidable contributions.”
Verizon Media Group, which also owns Tumblr as well as its journalism outlets, separately announced plans to lay off 7% of its staff around the world, in a move likely to affect some employees in the UK.
HuffPost’s US newsroom is unionised, while BuzzFeed has opposed such a move, although it is unclear whether this will affect the redundancy process.