May 20, 2022

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BuzzFeed’s CEO, Jonah Peretti, no longer pretends to care

Defector

About a year ago, BuzzFeed CEO Jonah Peretti laid off 70 employees, Including 47 US-based HuffPost employees, in an effort, as he put it, “to drive long-term sustainability”. Today, he announced that he will once again “shrink” his company’s workforce in order to “accelerate profitability.” Ashraf Beriti layoffs many of times During that interval At BuzzFeed, each time explaining to them is a necessary step towards profitability. But BuzzFeed, the massive digital media block it audience went Earlier this year through SPAC, it is now hugely profitable. Although its revenue of nearly $400 million last year was still standing So short From the frontier fraud predictions it has set itself, the company is, undeniably, healthy: Last year it was in the green for the second year in a row, $25.9 million in profit, up 132 percent year-over-year. But you see, it could be even more Profitable, if you simply hack into a financially underperforming part of the company.

BuzzFeed News, the investigative arm of a company that has done a great job around the world, is not a money maker for BuzzFeed. Thanks to the broken advertising economy on the Internet, the constant consolidation of the media, public distrust, and the general maladies of late-stage capitalism, it is generally unprofitable to produce great journalism.

In a sweeping meeting this afternoon — following resignation announcements from BuzzFeed News editor-in-chief Mark Schoofs and two other senior editors, Tom Namako and Ariel Kaminer — Peretti said he’s made cuts to BuzzFeed News. He said he had “plans to accelerate profitability for BuzzFeed News, including leadership changes, adding a dedicated business development suite, and a planned reduction in strength.” Shortly thereafter, Peretti handed things over to a temporary member of the company’s leadership and left the call.

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“People are angry he didn’t accept follow-up questions,” said a BuzzFeed News employee who was at the meeting, calling the call “acute.” Some BuzzFeed employees have said too much publicly.

A BuzzFeed News employee who spoke to the Defector said Peretti talked about the news team needing to do “quicker investigations” and get a higher metabolic rate. In other words: more work, faster, but with fewer people. In his farewell email, Schoofs emphasized that the cuts had nothing to do with employee work. He wrote in his book: “It’s not your fault.” E-mail, acquired by The Wrap. “You did everything we asked, and you produced a glowing press that changed the world.” Schoofs also said he hopes the company will at least avoid layoffs via voluntary acquisitions negotiated with the union.

Making cuts and laying off good employees at their jobs is simply part of the business model of media executives who build companies with the goal of scaling them further. criminally optimistic Unavoidable revenue expectations, and then have to engage in some ritual bloodletting in order to please the investors, despite the higher overall profits. But BuzzFeed News’ targeting of cuts is a change for Peretti, which he acknowledged at today’s meeting. According to a BuzzFeed News employee, Peretti said he was “no longer going to support the news with revenue from other divisions.” For years, Peretti has maintained that “news is the heart and soul of any big media company.” In 2015 he said BuzzFeed sticks to the news “Good for the world, good for business, and good for our company culture. In 2020, after editor and Future media maven Ben Smith left BuzzFeed News, Peretti Repeat his previous positionsaying Smith’s departure would not change the company’s identity.

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“We want to do everything possible to continue Ben’s legacy,” Peretti said. The The New York Times. “We want to break the news and have the courage and stand up to the power to do all the things that define BuzzFeed News.”

So what has changed? CNBC One possible explanation. A report published today cited people “with knowledge of the matter” who said that “several major contributors have urged Peretti to shut down the entire news operation,” which employs about 100 people and loses “nearly $10 million annually.” It also included some amazing math for the stock market:

One shareholder told CNBC that closing the newsroom could add up to $300 million in market capitalization to distressed stocks. The digital media company went public via a special purpose acquisition vehicle in December. The shares immediately dropped nearly 40% in the first week of trading and never recovered.

It’s fun to wonder which anonymous people might have leaked this synopsis to the press, seeing as it simultaneously makes BuzzFeed News a financial burden on the company and Peretti emerges as the hero standing between moody investors and the newsroom. Such as penned by the reporter who wrote the story: “BuzzFeed CEO Jonah Peretti’s decision to offer voluntary buyouts to less than 30 newsroom employees is actually a compromise/olive branch for some important contributors who want to scrap the BuzzFeed newsroom entirely.”

In the end, how much Peretti may have previously cared about producing good press, or indeed anything other than profit margins, no longer matters. BuzzFeed is a public company that exists to make money for investors. Peretti exists to ensure that the company makes maximum money for investors. And so you end up with an award winning editing room that gets destroyed for no good reason.

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Update 7:20PM ET: BuzzFeed News Union . responds

The BuzzFeed News Union’s bargaining committee sent an email to the entire unit saying, basically, “Not so fast.” The email, obtained by Defector, reads in part:

Management can’t make layoffs or buyouts unless (i) it’s part of a full collective bargaining agreement (read: we have a union contract validated with force reductions…you know, that’s something we’ve been working on for over Two years!) or (2) there is a financial necessity (more on this below). Today the company assured us that there is currently no financial necessity, and while I’ve heard a lot about the news of “losing money” the truth is – as we all know! – The news is always at a loss. The important thing is that we are losing less now than ever before.

So: what is the necessity? Well, we went through one. Back in 2020, there I was A financial necessity caused by COVID. That’s why we negotiated a one-time agreement to make some small cuts in effect and saved a lot of jobs through the work-sharing arrangement we proposed and the company eventually agreed to. But again, in both Brews and our meeting with management’s negotiating committee this afternoon, management confirmed that’s true not financial necessity. So, if there are purchases, they will have to be negotiated as part of the full collective bargaining agreement.

BuzzFeed did not immediately respond to Defector’s request for comment.