New York: Digital media company BuzzFeed is laying off 12% of its workforce, citing deteriorating economic conditions.
The New York-based business did not specify how many employees were being let go when it announced it in a regulatory filing on Tuesday. BuzzFeed has 1,522 employees, according to data provider FactSet, so 180 of those will be let go.
BuzzFeed relies on advertisers, but they have generally reduced their spending in response to rising costs. In a company's budget, advertising expenses are often the most flexible and often the first to face cuts.
Jonah Peretti, co-founder and CEO, wrote to employees, "We must invest in our strategy to best serve our audience, and readjust our cost structure, if we are to weather the economic downturn that has come." I believe will grow well till 2023.
Recently, layoffs have also been announced by social media and other businesses that rely on digital advertising, including Gannett, Twitter, Snap and Facebook parent company Meta.
In addition to the state of the economy, BuzzFeed on Tuesday cited job cuts due to the integration of Complex Networks, a provider of youth entertainment that it paid $300 million to acquire from Verizon and Hearst last year.
According to Buzzfeed, the job cuts should end by the end of the first quarter of 2023. The costs associated with the job cuts are estimated to be between $8 million and $12 million. This will be scheduled for the fourth quarter of this year.
In afternoon trading, shares of BuzzFeed fell more than 4% to $1.09. Less than two years ago, when the company went public through a merger with a special purpose acquisition company, they traded near $10.
As a serious competitor in the news industry, BuzzFeed, founded by Peretti in 2006 and initially known for listicles and online quizzes, won a Pulitzer for international reporting last year. Tasty, the world's largest social food network, is one of its other brands.
It is acquiring rivals such as HuffPost, a publication it started in 2005 under the name The Huffington Post, which it will buy from Verizon Media in 2020.