BuzzFeed CEO pressured by investors to close news division

Hailey Chin

BuzzFeed Inc. CEO Jonah Peretti was reportedly urged by the company’s investors to close the news division. This is a decision that a shareholder claims could boost BuzzFeed’s market capitalization by up to $300 million, according to the New York Post.

BuzzFeed is an American internet-based media company that was founded in 2006 by Peretti and John S. Johnson III. The company is well known for its quizzes and massive online presence, primarily through its YouTube channel, which has garnered over 20 million subscribers and hosts popular web series “Worth It” and “BuzzFeed Unsolved.”

BuzzFeed has enjoyed success through this media and according to its fourth quarter report, it consistently increased revenues by 24% to $397.6 million and had net income increase by 132% to $25.9 million.

While its news division may not be the most popular or profitable, it has proven itself as having talented journalists. It won a Pulitzer Prize in 2021 for its investigation of detention centers for Muslims in China.

However, Peretti expressed that by decreasing the size of the news division, BuzzFeed would be able to shift its focus on more popular areas with its audience. This would allow the company to pursue different social media avenues, such as TikTok. In doing so, he hopes to increase the overall profitability of BuzzFeed.

“We will prioritize investments around coverage of the biggest news of the day, culture and entertainment, celebrity and life on the internet,” Peretti said in an earnings call.

BuzzFeed has offered voluntary buyouts to its non-union news staff, such as reporters and editors who cover investigations, inequality, politics or science and have worked for the company for more than a year.

Buyouts are when employers provide voluntary severance packages to employees. This has prompted the resignation of several top editors, including Editor-in-Chief Mark Schoofs, news director Tom Namako and executive investigations editor, Ariel Kaminer.

“The cuts impact around 1.7 percent of our total work force today,” Peretti wrote to The New York Times, “and we do not take that lightly.”

In a January filing with securities regulators said BuzzFeed had 1,524 employees in and out of the United States, according to NPR. The cuts would affect approximately 25 people.

BuzzFeed staff members viewed this decision by Peretti as disrespectful and hurtful, as it is clear that the company no longer values their work.

“We’ve had freedom to chase wild, impossible stories,” Rosalind Adams, an investigative reporter at BuzzFeed News, tweeted. “It’s a sad day to watch @BuzzFeedNews move away from valuing that work.”

BuzzFeed went public in December and had its shares fall by 40% within the first week. It is unclear how the downsizing of the news division will affect BuzzFeed in the future, but since it has gained a loyal following through its YouTube channels, the impact should not be too large.