BuzzFeed News, a renowned digital news platform, will be shutting down, according to a memo sent by CEO Jonah Peretti to the company's employees. Peretti cited the challenges of a business model tailored for social media, which has become unsustainable, as one of the reasons for the closure. He also mentioned that he had "overinvested" in BuzzFeed News, despite the lack of financial support required for journalism. The CEO also blamed the pandemic, a recession in the tech industry, a declining stock market, and decelerating digital advertising for the decision. The company will now focus its news efforts on the profitable Huffington Post, which has a loyal audience.
BuzzFeed News is the latest media company to make major cuts due to falling revenue and layoffs across the industry. Other media companies like ABC News, NPR, and USA Today parent Gannett have also announced staff reductions. Newspapers are facing higher distribution and labor costs, while live broadcast journalism faces pressure from streaming services. There are also fears of a recession, which historically cuts into digital ads, a major source of revenue for many media companies.
BuzzFeed News began as its own division in 2011 and won a Pulitzer Prize for international reporting in 2021. The publication is known for its high-profile stories, including coverage of China's campaign against the Uyghurs and sexual assault allegations against actor Kevin Spacey. However, over the past five years, BuzzFeed has cut down on operations, laying off 15% of its workforce in 2019 and shutting down its Australia and U.K. operations in 2020. In 2021, BuzzFeed went public by merging with a special-purpose acquisition company, but the company's share price fell from $9 to $6 on the first day following the merger and has continued to fall since then, currently trading at $0.75.
BuzzFeed has gained attention for its investment in artificial intelligence, with the company rolling out AI-written content in February. Peretti has said he hopes to transform the company into the "premier platform for AI-powered content." His most recent memo promised to bring AI to "every aspect of our sales process."
In conclusion, BuzzFeed News' closure is a significant event that reflects the challenges facing the media industry, particularly in the era of social media and declining digital advertising. The company's focus on AI-powered content will be worth watching as it seeks to transform itself and remain relevant in the industry.