BuzzFeed shuts down its news arm, lays off 15% of staff as 2 top executives leave

• BuzzFeed News is shutting down as part of 15% cuts at the company that sent its stock price tumbling.
• Top executives Christian Baesler and Edgar Hernandez, who joined when BuzzFeed acquired Complex, are exiting.
• The digital media company has struggled financially since its 2021 IPO.

BuzzFeed is shutting down BuzzFeed News along with 15% layoffs across the organization’s divisions, or 180 people, according to a memo from CEO Jonah Peretti that was shared with Insider.

Two top BuzzFeed executives, Christian Baesler, COO, and Edgar Hernandez, CRO, will also leave the company, but will stay until April and May, respectively, according to the memo. (Read the full memo below.)

BuzzFeed News was a passionate project of Peretti’s. He has garnered attention with flashy investigations, winning a Pulitzer Prize for international reporting in 2021.

But over the years, it has been criticized for not holding it to higher standards of profitability. At one point, according to reports, shareholders urged it to shut down.

In his note to staff, Peretti admitted making mistakes that led to the cuts. He blamed the difficulty integrating BuzzFeed and Complex, which BuzzFeed acquired in 2021. He also admitted to overinvesting in BuzzFeed News and not keeping the company at high enough profitability standards.

“I could have handled these changes better as the CEO of this company and our leadership team could have performed better despite these circumstances,” he wrote. “Our job is to adapt, change, improve and perform despite the challenges of the world. We can and will do better.”

The news was greeted with anger and sadness by the company’s insiders. “It breaks my heart that the mishandling of this whole thing has been brutal,” one said. Elsewhere the wisdom of bringing digital media, which overall has struggled to find a profitable model, into public markets has been criticized.

Peretti controls the company even as time is running out for him to raise the stock price. The former digital media darling has struggled to live up to expectations since raising millions in venture capital and then going public in December 2021 via a special purpose acquisition firm. Investors withdrew most of the money raised by the SPAC, leaving BuzzFeed with little funds to expand, and the advertising market took a turn for the worse.

To finalize BuzzFeed’s SPAC deal, Peretti agreed to give BuzzFeed’s largest shareholder, NBCUniversal, up to 1.2 million of its 6.4 million shares in December if the price drops below $12.50. on a certain date, according to a filing.

BuzzFeed’s stock price has plummeted from its public debut by about $10 to less than $1 a share. Today’s news sent it down again, nearly 24%, to 72 cents a share as of midday; its market cap will fall below $100 million, about a third of what BuzzFeed paid for Complex less than two years ago.

The company has cut staff in two rounds of layoffs since going public, most recently cutting 12% of its team in December, or 180 employees. A handful of BuzzFeed’s Complex Networks senior executives departed as part of that round, including Complex President Justin Killion. In a separate high-profile departure, Buzzfeed CTO Peter Wang departed in February after three years.

The rest of the media industry hasn’t been immune to cuts over the past year as advertisers slashed spending in a weakened economy.

The newly exited executives, Baesler and Hernandez, were longtime Complex figures who joined BuzzFeed through the acquisition of Complex. The goal was to expand BuzzFeed’s audience and advertising base through Complex, a digital media company focused on hip-hop and sneaker culture.

Once the companies merged, the two executives were promoted to C-level roles. But after the deal closed, insiders began to think that BuzzFeed, which is driven by videos and short-form lists , mismanaged the brand and failed to appreciate the value of long-form, host-driven video series like ‘Hot Ones’ and ‘Sneaker Buying’.

BuzzFeed will announce its first quarter financial results on May 9. BuzzFeed declined to comment on the record.

Read BuzzFeed CEO Jonah Peretti’s note to staff on the layoffs and closure of BuzzFeed News:

Hi everyone,

I am writing to announce some difficult news. Today we are reducing our workforce by approximately 15% in our business, content, technology and administration teams and are beginning the process of shutting down BuzzFeed News. We are also proposing headcount reductions in some international markets.

Affected employees (other than those in BuzzFeed News) will receive an email from HR shortly. If you receive this note from me, you are unaffected by today’s changes. For BuzzFeed News, we have entered into discussions with the News Guild about these actions.

As part of today’s changes, both our CRO Edgar Hernandez and COO Christian Baesler have decided to exit the company. I am grateful to both of them for their passion and dedication to Complex and to BuzzFeed, Inc. Christian will be with us through the end of April and Edgar through the end of May to help with the transition.

Marcela Martin, our President, will assume responsibility for all revenue-related functions effective immediately. In the US, Andrew Guendjoian is our new Head of Sales and Ken Blom will continue in his role as Head of Revenue Operations. Globally, international sales will go under Rich Reid, Head of International and Head of Studio, who also reports to Marcela.

I have great confidence in this revenue leadership team and the first plans I’ve seen from them to accelerate the performance of our Business Org. We’ll be sharing more about their plans in next week’s Business All Hands (and we’re extending an invitation to the entire company).

The changes the business organization is making today are focused on de-leveling their organization, increasing the speed and effectiveness of presentations, optimizing our product mix, doubling down on creators and starting make AI improvements to every aspect of our sales process.

While layoffs occur across nearly every division, we’ve determined that the company can no longer continue to fund BuzzFeed News as a standalone organization. As a result, we will be speaking with the News Guild about our cost-cutting plans and what this will mean for affected union members.

HuffPost and BuzzFeed Dot Com have signaled that they will open a number of select roles for BuzzFeed News members. These roles will align with the business goals of those divisions and match the skills and strengths of many BuzzFeed News editors and reporters. We raised this idea with the News Guild this morning and look forward to discussing it further. Going forward, we will have a single news brand in HuffPost, which is profitable, with a loyal front page direct audience.

I want to explain a little more about why we have come to these deeply painful decisions. We’ve faced more challenges than I can count in recent years: a pandemic, a declining SPAC market that has been producing less capital, a tech recession, a tough economy, a falling stock market, a decelerating digital advertising market, and an ongoing audience and platform shifts. Addressing all of these hurdles at once is part of the reason we’ve had to make tough decisions to eliminate more jobs and cut expenses.

But I also want to be clear: I could have handled these changes better as the CEO of this company and our leadership team could have performed better despite these circumstances. Our job is to adapt, change, improve and perform despite the challenges of the world. We can and will do better.

In particular, the process of integrating BuzzFeed and Complex, and unifying our two business organizations, should have been done faster and better. The macro environment is challenging, but we had the potential to generate much more revenue than we’ve achieved in the last 12 months.

Also, I made the decision to overinvest in BuzzFeed News because I love their work and their mission so much. This made me slow to accept that the big platforms wouldn’t provide the distribution or financial backing needed to support premium and free journalism purpose-built for social media.

More generally, I regret not holding the company to higher standards of profitability, to give us the cushion we need to handle industry and economic downturns and avoid painful days like today. Our mission, our impact on culture, and our audiences matter most, but we need a stronger business to protect and support this important work.

Keep in mind that we’ve exhausted many other cost-saving measures to preserve as many jobs as possible. We are reducing budgets, open roles, travel and entertainment, and most other non-revenue-generating discretionary expenses. Just as we reduced our footprint in New York last year, we will reduce our real estate in Los Angeles, from four buildings to one, which saves millions in costs and mirrors our current state of hybrid work.

I have learned from these mistakes and the team going forward has also learned from them. We know that the changes and improvements we are making today are necessary steps in building a better future.

Over the next couple of months, we will work together to run a more agile and focused business organization with the ability to generate more revenue. We will focus our news efforts on HuffPost, a profitable brand with a loyal and highly engaged audience that is less reliant on social platforms. We will enable our editorial teams across our brands to do the best creative work and create an interface where that work can be packaged and brought to advertisers most effectively. And we will bring more innovation to customers in the form of creators, AI and cultural moments that can only happen through BuzzFeed, Complex, HuffPost, Tasty and First We Feast.

It may not seem like it today, but I am confident that the future of digital media is ours. Our sector is suffering and is ready to be reborn. We are making great efforts today and will start fighting for a bright future.

On Monday, we will begin discussions with each division about the way forward. And in the meantime, I hope you can take some time for yourself this weekend.

Thank you for supporting each other through a difficult day.