BuzzFeed Founder and CEO Jonah Peretti
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BuzzFeed The company announced Tuesday, amid what people familiar with the matter described as investor concerns that the division is weighing on the company.
Several major shareholders have urged BuzzFeed CEO Jonah Peretti to shut down the entire news operation, the people who requested anonymity said because the discussions were private. BuzzFeed declined to comment.
BuzzFeed News, its content division, has about 100 employees and loses about $10 million a year, two of them said. The company, which also has advertising and commercial divisions, say Tuesday Its full-year content revenue grew 9% in 2021 to $130 million.
One shareholder told CNBC that closing the newsroom could add $300 million in market capitalization to the struggling stock. The digital media company went public through a special purpose buyback vehicle in December. The stock immediately fell nearly 40% in its first week of trading and hasn’t recovered yet.
Shares were up about 1% in midday trading Tuesday after the company released its first quarterly earnings report.
Peretti has been a major champion of the importance of BuzzFeed News for many years, called it “good for the world, good for business, and good for our company culture.” The organization’s editorial office has won several awards, including a Pulitzer Prize and George Polk Award.
“This morning, we announced our plans to accelerate profits for BuzzFeed News, including a leadership change, the addition of a dedicated business development team, and a planned reduction in the workforce,” Peretti said on Thursday. Three. “We will prioritize investments around coverage of the day’s biggest news, culture and entertainment, celebrities and Internet life.”
Read more: BuzzFeed says people are spending less time on Facebook
The company has offered voluntary acquisitions to fewer than 30 employees, according to a person familiar with the matter, who requested anonymity because the decision is private. The acquisition is open to reporters and editors only that cover investigations, inequality, politics or science and have been with the company for more than a year. BuzzFeed has a plan to do it acquisition proposal for New York’s NewsGuild regarding its US employees.
Instead of shutting down BuzzFeed News, Peretti is trying to make the division profitable. He has a ready-made template: He made a decision laid off 70 HuffPost employees last year after acquired the company from Verizon Media.
“Even though BuzzFeed was a profitable company, we didn’t have the resources to support another two years of losses,” Peretti said at the time. “The most responsible thing we can do is manage our expenses and make sure BuzzFeed – and HuffPost – is set up for long-term prosperity. That’s why we made the tough decisions. is to restructure HuffPost to reach profitability faster. Our goal is for HuffPost to break even this year.”
HuffPost is currently profitable, according to a person familiar with the organization.
The editor-in-chief departs
Before the job cuts, Mark Schoofs, editor-in-chief of BuzzFeed News, told employees that he was leaving the company today. Samantha Henig, BuzzFeed News’ executive strategy editor, will temporarily run the newsroom.
Deputy editors Tom Namako and Ariel Kaminer, investigative editors, is also resigning. Namako is join NBC News’ digital activity as executive editor.
In its fourth-quarter earnings release, Buzzfeed said quarterly revenue grew 18% year-over-year to $146 million. Profit increased to $41.6 million, up 29% year-on-year.
Full-year revenue grew 24% year-on-year to $398 million. Net income more than doubled year over year to $25.9 million.
SEE: Why there was so much volatility in BuzzFeed after it went public via SPAC
Disclosure: NBC and CNBC are divisions of NBCUniversal.
