Despite $400 million in equity investments by NBC Universal since 2015, BuzzFeed is preparing to lay off 15% of its staff, or around 250 people, according to the Wall Street Journalwhich cites people familiar with the matter.
The company says it will refocus its resources towards content-licensing and e-commerce in order to try and steer the beleaguered news outlet on the path to profitability.
Another driver of the cuts is to help the company avoid raising money again, one of the people said. BuzzFeed has raised about $500 million and was valued at about $1.7 billion following its last funding round in 2016.
Its investors include Comcast Corp.’s NBCUniversal—which has invested $400 million—Andreessen Horowitz, Lerer Hippeau Ventures, New Enterprise Associates, RRE Ventures and Hearst Ventures. –WSJ
The Journal notes growing pressure in the online publishing space and digital advertising sales – pointing to competition from Google and Facebook, and recent industry moves such as the $5 million sale of online publisher Mic to women-focused publisher Bustle Digital Group. Lifestyle-focused publisher Refinery29, meanwhile, laid off 10% of its workforce last fall.
BuzzFeed, launched in 2016 by CEO Jonah Peretti, was a pioneer in “native advertising,” designed to mimic the look and feel of editorial content. As that model has become increasingly difficult to grow, the company began selling ads using “programmatic,” or automated platforms last year.
Last week the news outlet came under fire after publishing a story that President Trump instructed his longtime lawyer, Michael Cohen, to lie about the timeline of a Trump Tower Moscow project that never panned out. In response to the report, Special Counsel Robert Mueller took the rare step of issuing a public statement refuting the report, with the Washington Post later reporting that “Mueller’s denial, according to people familiar with the matter, aims to make clear that none of those statements in the story are accurate.”
The 15% workforce cut follows a 2017 round of layoffs, when BuzzFeed cut loose around 100 staffers after missing its revenue target of around $350 million by a 15% – 20%; a miss which put the company’s IPO on hold. In 2016 the company brought in around $250 million in revenue.
Since then, BuzzFeed closed its French operations and fired their in-house podcast production team.