Layoffs Come for BuzzFeed, Business Insider Newsrooms

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The digital media doom loop continues apace.

Thursday delivered a double-whammy of bad news: the Axel Springer-owned Business Insider announced it was laying off 10% of its US newsroom staff, while BuzzFeed decided to shutter its entire Pulitzer and National Magazine Award-winning BuzzFeed News division.

What’s New is Old

The end of BuzzFeed News marks the end of an era for so-called New Media — one in which optimism reigned that social networks could be harnessed to tap a massive audience base. BuzzFeed rode that bullishness to extraordinary heights, raising nearly $700 million through 10 funding rounds and, at one point, reaching a valuation of $1.5 billion, according to CrunchBase. But relying on social media giants is a fickle game (may we invoke “pivot to video”?). BuzzFeed did manage to stumble into an IPO, unlike digital peers Vice and Vox, riding the SPAC wave in December 2021. But Buzzfeed’s share price is now down some 90% from its high-water mark, and closed Thursday trading well under a dollar.

Business Insider, meanwhile, has been living a much different, though no-less challenging life in the digital media world: that of a single piece in Axel Springer’s massive consolidated media empire (and Axel Springer itself is a subsidiary of private equity giant KKR). But scale hasn’t equaled success. Layoffs already hit BI’s Axel Springer’s compatriots, including a 14% headcount culling at newsletter The Morning Brew last month and the shuttering of Politico’s tech-focused sister site Protocol late last year.

Despite their different paths, management at both outlets were singing remarkably similar tunes on Thursday:

  • “The economic headwinds that have hurt many of our clients and partners are also affecting us,” Barbara Peng, the president of Insider, Inc., wrote in an email to staff first reported by The Daily Beast. “Unfortunately, to keep our company healthy and competitive, we need to reduce the size of our team. ” Around 100 positions across departments will be eliminated in the cuts.
  • BuzzFeed CEO/founder Jonah Peretti told staff he was “slow to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium, free journalism purpose-built for social media” and that the layoffs are “clearly a massive failure on my part.”

BuzzFeed’s revenue chief Edgar Hernandez and operating chief Christian Baesler are exiting the company amid the layoffs, while Peretti told staff he is staying on as CEO, despite his massive failure.

Front Page News: It’s not just digital media players either. Also this week, the McClatchy-owned Miami Herald suffered a wave of layoffs, and sources told CNBC that ESPN is preparing for its own layoff wave. Meanwhile, NPR laid off some 10% of its staff in March, and the Jeff Bezos-owned Washington Post slashed 20 staffers in January. Ouch.