Jonah Peretti, the CEO of BuzzFeed News announced in a memo to employees on Thursday that the company, which has been at the forefront of digital news for the past ten years, will be shutting down. The CEO cited the challenges of sustaining a news model designed for social media and stated that the company will now prioritize its profitable venture, the Huffington Post.
In a major restructuring move, Peretti also announced significant job cuts, totaling about 180 redundancies, which account for roughly 15% of the company's workforce. As part of this decision, BuzzFeed News will be shut down and two senior executives will be leaving the company. Despite the cutbacks, HuffPost will continue to publish news, but with reduced coverage due to previous cutbacks. Peretti emphasized that despite these challenges, HuffPost remains profitable due to its loyal audience, who visit the site directly rather than relying on social media for distribution.
Why it matters
BuzzFeed gained huge investments in the early 2010s as it capitalized on social media to distribute content, including original news reporting. Despite hiring hundreds of journalists and winning a Pulitzer Prize, the online news industry's challenges affected BuzzFeed's finances. Disney considered buying the site for $1B in 2014, but no deal was made. BuzzFeed eventually went public, but its share price fell, and it's now worth less than $100M. The announcement of BuzzFeed News' closure led to many journalists mourning online.