Wednesday, 30 January 2019

Do You Still Have A Job At BuzzFeed?

quote [ As you know, the company is going thru a reorganization... ]

So, apparently the Clickbait factories are going through a hard time as well. (full NYT article in extended)

Reveal

BuzzFeed Plans Layoffs as It Aims to Turn Profit

BuzzFeed, often hailed as the future of publishing and a leading producer of digital content, plans to lay off 15 percent of its work force, or around 200 employees, according to a memo sent to the staff on Wednesday night.

The company’s management team, led by the chief executive, Jonah Peretti, has been working on the staff cuts over the past few months, two people with knowledge of the plans said. They asked not to be named because they were not authorized to speak on the matter. The cuts will affect the international and web content departments, including the news division.

Mr. Peretti sent a note to employees at 6:30 p.m. Eastern time with the subject line “Difficult Changes.”

“Hello BuzzFeeders,” he wrote. “I’m writing with sad news: we are doing layoffs at BuzzFeed next week. We will be making a 15% overall reduction in headcount across the company. I’m sending this tonight because I wanted you to hear it from me directly instead of from the press.”

The move is meant to trim costs and maintain growth as the company aims to hit profitability this year. BuzzFeed, which employs over 1,300 people, generated more than $300 million in revenue in 2018. That was a jump of better than 15 percent from the previous year, but the company still loses money.

[UPDATE: BuzzFeed’s first round of layoffs puts an end to its national news desk.]

Known for its mastery of the viral arts, the site relies on an army of editors, producers and journalists to produce thousands of pieces of content each week, as varied as cooking videos and breaking news reports.

BuzzFeed News, a money-losing division of the company led by the editor Ben Smith, came under scrutiny in recent days after publishing an article reporting that President Trump had instructed his former lawyer, Michael D. Cohen, to lie in his testimony to Congress. In a rare public statement, the special counsel’s office denied the report. Mr. Smith has said he stands by the article.

Digital publishers have suffered as shifting reader habits and whimsical-seeming algorithm adjustments at Facebook have cut into revenue. Vice Media reduced staff last year in a bid to reach profits. Mic, a site aimed at younger readers, cut the majority of its staff before being sold off in a fire sale to a competitor. And on Wednesday CNN Business reported that Verizon Media Group, which includes Yahoo, AOL and HuffPost, plans to reduce its staff by 7 percent — a cut of some 800 employees.

Advertisers generally pay less to reach online readers than print devotees, but investors were banking on the idea that online ad rates would significantly rise and digital publishers would dominate. That hasn’t happened as Facebook and Google continue to siphon off the majority of ad dollars.

BuzzFeed’s board recently agreed that the company needs to start turning profits, the people said. The site has lost money for most of the years it has been in operation, not unusual for a start-up. Venture-backed companies like BuzzFeed often spend big at first in a bid to expand. But as the company closes in on a decade in business, investors are losing patience.

In his note, Mr. Peretti said, “The restructuring we are undertaking will reduce our costs and improve our operating model so we can thrive and control our own destiny, without ever needing to raise funding again. These changes will allow us to be the clear winner in the market as the economics of digital media continue to improve.”

Image
Jonah Peretti, the chief executive of BuzzFeed, in 2016 in what was to become the publisher’s new expanded newsroom in New York.CreditCole Wilson for The New York Times

BuzzFeed has raised nearly $500 million in venture funding, with $400 million coming from NBCUniversal.

Mr. Peretti, a graduate of the M.I.T. Media Lab and a founder of HuffPost, started BuzzFeed in 2006 as a something of an experiment to see whether his team could create content that readers were eager to share on social media. It became a genuine business by 2011 and amassed a large following by hitting on a formula that took advantage of the new publishing platforms on Facebook, YouTube and Twitter. BuzzFeed’s monthly readership is nothing to LOL at: 690 million, a figure that has made it the envy of the web.

That still may not be enough. BuzzFeed took a hit when Facebook introduced a sweeping change in 2016 that significantly reduced the visibility of articles and videos from professional publishers in its News Feed, its main artery of content. The change hurt all content companies — including Vox Media, Refinery29 and Group Nine, the publisher of popular sites like The Dodo — and forced them to adjust their strategies to rely less on platforms like Facebook.

In a November interview with The New York Times, Mr. Peretti proffered an audacious solution: a series of mergers with five or six top internet publishers, including Vice, Vox Media, Group Nine and Refinery.

The industrial logic was evident, he said. A larger entity could lobby for a higher percentage of the ad dollars that Facebook and Google share with publishers when their content, videos in particular, run on the platforms. In turn, publishers would be able to supply them with content that is safe for general users and friendlier for advertisers.

“Having some bigger companies that actually care about the quality of the content feels like something that’s very valuable,” he said at the time.

In an effort to add more revenue streams, BuzzFeed has started new business lines, offering a cookware line at Walmart and a toy store in Manhattan. It also started placing banner ads across its website. That represented a change of course for Mr. Peretti, who once said he didn’t want banner ads, because they significantly slowed down the site. In their place he pushed for native ads — posts that look like editorial content but are created in cooperation with marketers.

Native advertising slowed considerably in 2017, however. Coupled with changes at Facebook, the rate of revenue growth declined. The addition of banner ads significantly added to BuzzFeed’s coffers last year, the people said.

In his note to the staff, Mr. Peretti said he took the layoffs to heart.

“On a personal note,” he wrote, “I’ve never thought about my job as ‘just business.’ I care about the people at BuzzFeed more than anything other than my family. This will be a tough week for all of us and I realize it will be much worse for the people losing their jobs. To them, I want to say thank you, I’m sorry our work together is ending this way, and I hope we get to work together again in the future. Our loss will be to the benefit of other organizations where I know you will go on to make formidable contributions.”

BuzzFeed has had staff reductions in the past. In 2017, it cut 100 of its 1,600-employee work force after it failed to meet revenue targets that year.

As BuzzFeed looks to cut down its staff once again during a difficult period for web media companies, traditional publishers have also struggled. Gannett, the owner of USA Today and The Detroit Free Press, has cut its work force sharply over the past few years. A company overview from the end of 2015 showed 19,600 employees. By the end of 2017, the figure was down to 15,300.

On Wednesday, there were more layoffs at Gannett newspapers across the country, including The Indianapolis Star and The Record in New Jersey. The company is slimming down in an effort to shore up its shrinking profits. Separately, a company controlled by the New York hedge fund Alden Global Capital — which itself has made drastic cuts at newspapers in its stable, including The Denver Post — has expressed interest.

Correction: Jan. 25, 2019

Because of an editing error, an earlier version of this article misstated Gannett’s reason for reducing the size of its work force. It is to shore up its shrinking profits, not to attract a buyer.

A version of this article appears in print on , on Page B1 of the New York edition with the headline: BuzzFeed Plans Layoffs As It Aims to Turn Profit.
[SFW] [business] [+4 Funny]
[by Paracetamol@10:00pmGMT]

Comments

lilmookieesquire said @ 5:56am GMT on 1st Feb
I like that an NPR defended Buzzfeed as a legit news service and now it’s getting gutted.
steele said @ 1:42pm GMT on 1st Feb
NPR is shit. They're all shit!

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