Nothing is going well for BuzzFeed.
A year after its hectic IPO, through the SPAC 890 5th Avenue Partners, the American online media saw its valuation melt by 90%.
The title is now only worth 1 dollar and three cents on the Nasdaq.
Its founder and CEO Jonah Peretti blames an unfavorable macroeconomic environment that is causing lower advertising revenues, as well as “
a change in the way citizens consume media
”.
On Tuesday evening, it announced that it had to lay off nearly 200 employees representing 12% of its payroll, mainly in its commercial and technological teams.
“We must reduce costs in the face of a situation that is likely to persist in 2023
, justifies Jonah Peretti.
BuzzFeed must now invest in segments that generate growth and build a more robust content creation model.
»
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Under pressure from its shareholders, who want the skin of its
“news”
division (loss of 10 million dollars a year), the pure web player had already had to separate, last spring, from about thirty journalists.
Competition from ultra-short videos
The medium, which has built its notoriety in part thanks to the success of its viral videos, today suffers from the preference of young users for ultra-short videos, like what is done on TikTok.
For the past few months, Jonah Peretti has been pointing to
“the continuous decline”
in the time spent by his users on his Facebook content, the media’s main audience vector.
BuzzFeed, which provides free online news and includes media outlets HuffPost, Complex Networks, and Tasty, depends on advertising, sponsored content, and commissions from e-commerce and sales of labeled products.
Last year, the net profit of the whole group amounted to 26 million euros.
Across the Atlantic, the fall of 2022 has turned into a social disaster for the media.
In recent weeks, CNN, the Gannett newspaper group, the AMC Networks television network and Paramount Global have all cut their staff.
For its part, the
Washington Post
has put an end to the print edition of its Sunday magazine, leading to the dismissal of a dozen employees.
