Buzzfeed is cutting its workforce by 15 percent in a move meant to boost its profitability, according to a memo sent to staffers by CEO Jonah Peretti on Wednesday. While the company has managed to increase its ad revenue over 2018 by “double digits,” the company is still facing a funding shortfall, writes CNN.
“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,” Peretti wrote.
Staff had caught wind that something bad was going down after employees learned that senior editors were being flown into the company’s New York headquarters. This caused speculation about staff cuts.
“[W]e’ve done extensive work examining the trends in our business and the evolving economics of the digital platforms. We’ve developed a good understanding of where we can consolidate our teams, focus in on the content that is working, and achieve the right cost structure to support our multi-revenue model,” Peretti wrote.
“We are confident the changes we are making will put us on a firm foundation and allow us to invest and grow sustainably for years to come.”
The company previously laid off about 100 workers in November 2017 and a smaller round of layoffs when it shuttered its podcast division. The company has continued to hire in other areas despite the layoffs.
Last fall, Peretti said that he was open to merging with other digital media companies in order to be in a better position to gain advertisers. He specifically mentioned Group Nine as one of the companies he would work with, and he has spoken with CEO Benjamin Lerer, but so far no deal has come to light.
The news comes as the Buzzfeed News division faces scrutiny after it published a story about Michael Cohen being directed to lie to Congress by Donald Trump. In the story, Buzzfeed claims that Trump told his former lawyer to lie about the president’s involvement in a Moscow tower project, which Trump claims he wasn’t involved in.
According to Buzzfeed, sources say that Trump knew about the project and supported a plan to connect him with Russian President Vladimir Putin. He allegedly told Cohen to say that the negotiations ended months before they actually did.
President Trump Directed His Attorney To Lie To Congress About The Moscow Tower Project https://t.co/NtxPAXMUOa— BuzzFeed (@BuzzFeed) January 18, 2019
In a rare rebuttal, Special Counsel Robert Mueller’s team released a statement saying that elements of the story were not accurate, though a spokesperson for the team did not release any details about which aspects of the story were incorrect.