Loss Making Buzzfeed Firing Another 250 Staff

It is becoming a start-the-year tradition for Buzzfeed to fire staff in January, they did so last year and last night the CEO Jonah Peretti emailed staff telling them he’s firing 250 of them next week:

Hello BuzzFeeders,

I’m writing with sad news: we are doing layoffs at BuzzFeed next week. We will be making a 15% overall reduction in headcount across the company. I’m sending this tonight because I wanted you to hear it from me directly instead of from the press.

Over the past few months, we’ve done extensive work examining the trends in our business and the evolving economics of the digital platforms. We’ve developed a good understanding of where we can consolidate our teams, focus in on the content that is working, and achieve the right cost structure to support our multi-revenue model. We are confident the changes we are making will put us on a firm foundation and allow us to invest and grow sustainably for years to come.

I’m so proud of what our team accomplished over the last year, including diversifying our revenue, and growing our business double digits. Unfortunately, revenue growth by itself isn’t enough to be successful in the long run. The restructuring we are undertaking will reduce our costs and improve our operating model so we can thrive and control our own destiny, without ever needing to raise funding again. These changes will allow us to be the clear winner in the market as the economics of digital media continue to improve.

I’ll share more about our future structure in a few days, but today I want to focus on what will be a difficult week, especially for the people who are leaving the company. These are talented people, friends, and valued colleagues, who’ve made huge contributions to our success, and who’ve done nothing wrong. Even though I’m confident this is the right business decision, it is upsetting and disappointing.

On a personal note, I’ve never thought about my job as “just business.” I care about the people at BuzzFeed more than anything other than my family. This will be a tough week for all of us and I realize it will be much worse for the people losing their jobs. To them, I want to say thank you, I’m sorry our work together is ending this way, and I hope we get to work together again in the future. Our loss will be to the benefit of other organizations where I know you will go on to make formidable contributions.

We will be back to you with specifics on the process by Monday at the latest. Thank you all in advance for your compassion and kindness as we go through this process.

Jonah

Buzzfeed has burnt through over $500 million of investors money which they are unlikely to ever get back. Investors are no longer interested in an online land grab for readers without profits. Peretti is looking to merge the company with rivals as they strive to stem losses. Last year the struggling firm fired over a third of their UK staff. Presumably the UK editor Janine Gibson quit last week because she didn’t want to oversee another round of job cuts…

Buzzfeed Loses £1.9 Million, Founder Mulls Merger With Vice

Buzzfeed UK filed their accounts for 2017 on Christmas Eve. They show that revenue rose an impressive 62% to £33,363,304, unfortunately expenses also rose 48% to £35,288,846 resulting in an operating loss of £1,900,229. Which is an improvement on the previous year’s £3,543,554 loss. Head count rose in 2017 from 204 to 283 staff, resulting in a wage bill of £19,073,982 giving an average wage cost of £67,399. That was way too high in today’s media environment…

These accounts only cover the financial year up to December 2017, sure enough the following January Buzzfeed let go of a third of the London staff. It will be interesting to see how this impacts the bottom line for this year. Buzzfeed previously got a substantial 23% of their traffic from Facebook, how the great algorithm change impacted Buzzfeed is yet to be seen. It is unlikely to have been positive for traffic…

Buzzfeed UK includes financial reporting for Germany, Brazil, Spain, Mexico and India – the French division was closed down. Buzzfeed’s CEO Jonah Peretti has told the New  York Times that a merger with Vice and other big digital media publishers would be a way for them to compete with Facebook and Google for advertising revenue. One thing is for sure, sky high valuations for new media assets are coming back down to earth becauseeveryone is for sale. Venture capital funded media assets like Buzzfeed are being sold at a fraction of their previous valuations. Buzzfeed has missed the window for an IPO and a chance for investors to cash in. Surviving in a tough market is the main game…

NUJ’s Buzzfeed Lobbying Letter Sparks Newsroom Anger

MediaGuido has previously reported on how the Buzzfeed newsroom is split over attempts by some staff to unionise. Above is a letter from the National Union of Journalists which was left on Buzzfeed employees’ desks in the office last week. Guido is not sure a patronising Steve Buscemi meme and a listicle on “12 Reasons Why Buzzfeed UK Needs Union Recognition” is the best way to convince staff of their case.

Multiple people in the Buzzfeed newsroom say the NUJ letter has caused genuine anger for two reasons. One Buzzfeed source says it is deeply misleading and takes credit for changes that were always going to happen. Buzzfeed journalists believe the pro-unionisation side of the office are lying to their colleagues about their achievements.

A second Buzzfeed source says the NUJ letter is significant because the Central Arbitration Committee is currently deciding whether there is to be a secret ballot on unionisation, and the letter does not even countenance the idea that there should be a vote. That Buzzfeed source says: “It’s strange a movement that professes to be about rights for the workers doesn’t even want those workers to have a say from the outset”. A third Buzzfeed source says: “People are exhausted by all this, it is tearing the office apart”. It seems the NUJ’s dirty tactics of fibbing to hacks and opposing workplace democracy are not going down well…

Buzzfeed Political Editor Runners and Riders

The departure of Jim Waterson to the Guardian means Buzzfeed are looking for a new political editor. It’s a sweet gig: you get free pizza and beer on Fridays and only have to file once every couple of weeks. As ever MediaGuido brings you your runners and riders…

  • Emily Ashton, Buzzfeed: An internal hire is most likely as Lobby colleagues will not exactly have been convinced that the future is at American websites who promise to take over the world and then fire everyone. Ashton is a proper hack and chairman of the Lobby. Good bet.
  • Alex Spence, Buzzfeed: The other surviving member of the Buzzfeed politics team, scourge of Tory MPs with mildly embarrassing social media accounts. Short odds.
  • Alberto Nardelli, Buzzfeed: That scoop on the Brexit impact assessments came at a good time for him. Well-connected in the Cabinet Office.
  • Mark Di Stefano, Buzzfeed: The site’s former Australia pol ed moved over to be UK media correspondent as part of the recent Antipodean takeover. Funny on Twitter but limited knowledge of Westminster prior to six months ago.

And your external candidates:

  • Katy Balls, Spectator: Mr Steerpike can do the gossip, can do the politics and has the right chat for the Buzzfeed readership. But are they too base for her?
  • Mikey Smith, Mirror: Proficient in gifs and memes. Probably too old for the job.
  • Sebastian Payne, FT: Millennial, tick. Has Twitter, tick. Strong Insta game an added bonus. 
  • Harry Cole, The Sun: Experience running Westminster’s best online news operation for five years. Likes cats.
  • Matt Chorley, Little Read Box: Why limit those LOLs to an email when you can join Buzzfeed and just tweet them out? Chorley’s inner milennial could shine…
  • Steve Walker, Skwawkbox: Buzzfeed are in awe of his virality. Time for him to join the MSM?
  • Matt Turner, Evolve Politics: Matt isn’t really a die-hard Corbynista, he only pretends because he couldn’t find any other way into journalism. Has a Lobby pass now, but surely he craves the real respectability only Buzzfeed can offer? 
  • Owen Bennett, HuffPo: Should probably “keep his f***ing nose out of this”. If last week’s events are anything to go by…

Good luck…

UPDATE: Ladrbokes have opened a book…

Waterson New Guardian Media Editor

Buzzfeed’s political editor Jim Waterson has joined the Guardian as their new media editor. Looks like the competition just went up a notch. Will the last person to leave Buzzfeed please turn off the fridge full of free beer?

Buzzfeed Newsroom Split as Axed Staff Lobby Former Colleagues to Unionise

Last week MediaGuido brought you the news that Buzzfeed bosses had failed in their legal bid to prevent their workforce from unionising. Here’s the latest…

Buzzfeed’s Oxford Circus office (one of the most expensive pieces of real estate in London and a bonkers extravagance given recent layoffs) has always been deeply divided on unionisation. Around half opposed proposals for a union chapel from the start. These are the managers, editors, grown ups and proper hacks who realise that Buzzfeed employees get a much cushier deal than if they were churning at MailOnline or the Indy. The pro-union half are more ideological, more millennial and more likely to come from the quiz and cat gifs section of the office. They thought collective bargaining would improve their (already generous) pay and hours and help them avoid the sack. How did that work out…

In the latest round of redundancies, many of those pushing for unionisation left the company. Guido is assured there was no conspiracy by bosses to axe the union troublemakers. Yet far from healing a newsroom that has been torn apart, their departures have caused fresh problems…

When the Central Arbitration Committee ruled last week that Buzzfeed staff could proceed with unionisation plans, only for key agitators like Kelly Oakes and Francis Whittaker to have moved on, it left a phantom chapel. A ballot of remaining staff is now likely to decide whether unionisation will go ahead. Here’s the kicker: an aggressive lobbying operation is underway to try to convince Buzzfeed staff to back the union – remarkably it is being carried out by axed employees who no longer work there. Are they interfering out of comradely spirit, or because they want to screw over their former employer? None of them want to explain to MediaGuido why they have been trying to get their former colleagues to man the barricades and fight the boss class.

It is going down like a cup of sick with those on the other side, who see it as a hostile external attempt to undermine newsroom democracy. After a year of dealing with divisiveness which undermined their work, many remaining Buzzfeed staff are just glad to have jobs and want this to go away. Buzzfeed bosses are learning the hard way the perils of hiring a load of millennial Corbynistas…

Buzzfeed Fails In Legal Bid to Prevent Employees From Unionising

Breaking media news from the Central Arbitration Committee: Buzzfeed has failed in its bid to prevent its employees from forming a union chapel. Buzzfeed management hired pricey lawyers from Matrix Chambers to essentially argue that they had laid off so many staff that the number supporting collective bargaining had fallen below the 50% threshold. Buzzfeed staff reading today’s judgement will be left wondering if bosses fired pro-unionisation employees to prevent them from forming a chapel…

The Employer stated that the restructuring process was completed today and as of the close of business a total of 22 people within the company had left BuzzFeed. The Employer believed that a number of those who left the business after requesting voluntary redundancy, were members of the Union. The Employer further stating that “this fundamental change to the proposed bargaining unit may have a significant impact on the density of union members and support within the proposed bargaining unit for recognition.”

Two Buzzfeed journalists – Kelly Oakes and Francis Whittaker – gave evidence on behalf of the union. Both were then let go…

The committee came to a decision today that the threshold favouring recognition had been met and so the application for collective bargaining to be recognised should proceed. Buzzfeed spent big bucks trying to stop this from happening, and failed…

Last Days at Buzzfeed

Judging by these tweets, not a great day at “the future of journalism”:

Sad and entirely predictable news…

Facebook’s Retreat from News and Algo Change Panics Buzzfeed

Facebook’s Adam Mosseri announced last Thursday that it is getting out of the news business and going back to connecting people with personal stuff:

“Because space in News Feed is limited, showing more posts from friends and family and updates that spark conversation means we’ll show less public content, including videos and other posts from publishers…” 

Good for people who want to share pictures of their cats, bad for media organisations that have a business model based on cat GIFs. Twitter’s stock price rose 5% on the news that they will now be the main social news platform…

For Buzzfeed and other Facebook traffic driven organisations this is bad news, Buzzfeed gets some 23% of their traffic at the whim of Mark Zuckerberg. Unsurprisingly Buzzfeed bought adverts on Facebook on Friday pushing soon to be lost users to download their app. At one time Buzzfeed were spending millions on Facebook adverts, they may well have to do so again if their content is dropped from the Facebook feed. In the political sphere those sites that specialise in clickbaity headlines designed to go viral on Facebook may see a drop in traffic…

Approximately 7% of Guido’s traffic is referred from Facebook. Twitter on the other hand drives 23% of our traffic, just behind Google on 24%. The Spectator and Breitbart also rely on Facebook for some ~7% to 8% of their traffic. Skwawkbox and The Canary rely on Facebook respectively for a massive ~40% and ~48% of traffic…

N.B. Traffic data sourced from Similarweb.

BuzzFeed Doubles Planned Redundancies

A collective OMG in the BuzzFeed listicle nerve centre last night as staff were told planned redundancies are set to be more than doubled. Last month the outlet’s millennial scribblers were warned that 20 London roles would be axed, now they have been told 45 staff will go – grim news just weeks before Christmas. 14 of 33 news reporters are set for the chop as well as subs and six on the Buzz team. If 45 go that’s a third of BuzzFeed UK’s 140 staff. Average salaries of £60,000 were just not sustainable…

Layoffs at Buzzfeed UK

Layoffs at the “Buzz”, Commercial, News, and Admin teams at Buzzfeed UK announced in an all-staff email this evening:

“As our strategy evolves, we need to evolve our organization, too – particularly our Business team, which was built to support direct sold advertising but will need to bring in different, more diverse expertise to support these new lines of business. Unfortunately, this means we have to say goodbye to some talented colleagues whose work has helped us tremendously. In the US, we are restructuring select functions of the Business team, including Sales, Creative, Client Services, Ad Solutions, and Marketing, to better support our diversifying revenue model. In the UK, we are realigning the organization to focus on content for global audiences and our core U.K. News beats — investigations, politics, media, and social justice — and intend to make reductions across Buzz, Commercial, News, and Admin as a result. We will communicate today with everyone impacted by these changes. I’d like to thank the departing employees for their many contributions to BuzzFeed. They will be missed, and I know they will go on to do big things in the future.”

Those losses and bumper salaries starting to bite…

70 Million Reasons BuzzFeed Won’t Go Public

Buzzfeed’s long trumpeted IPO looks increasingly unlikely after sources inside the company told the Wall Street Journal it could miss its revenue target by 15-20%. The site was supposed to bring in $350 million this year, paving the way for a 2018 floatation. Actual revenue is expected to be $70 million short of that target…

The news, which emerged overnight in the US, is a blow to Buzzfeed staff, many of whom joined after being spun the line that they would be in for a major pay day during the eventual IPO. It follows mounting losses of over £3.5 million for Buzzfeed UK in 2016. Meanwhile WSJ says Vice News is also set to miss its revenue target and Mashable is selling for a quarter of what it was worth just last year. Trouble ahead for new media…

Mounting Buzzfeed Losses as Staff Salaries Average £60,000

The bottom line for Buzzfeed in 2016 is that it lost £3,543,554, which when added to the rolled up losses since 2013 means some £12,289,579 has been sunk into the venture so far. When it launched Buzzfeed derided display advertising as outdated and instead offered brands sponsored advertorial content. The search for revenue means you now see traditional display adverts on their homepage. The UK operation is small change for the parent company which is putting hundreds of millions of dollars into video in the hope that they will be able to divert TV advertising revenue into digital video revenue. This is the big bet for the many media ventures following the shining path of Vice News….

Rumours from inside the organisation that management consultants have been sent in are worrisome for the 200 odd Buzzfeed staff on – the filed accounts reveal – generous average packages of some £60,000. On the positive side Buzzfeed doubled their revenue last year to over £20 million. If they can do that again this year they will be extremely profitable…

Remoaners Lose as Voters Strongly Back ‘Hard’ Brexit

Remoaners have lost their battle to derail Brexit as the public overwhelmingly backs a ‘hard’ exit from the EU. A major new study from the LSE and Oxford University shows even remain voters now generally reject the ‘soft’ Brexit policies advocated by the remoan lobby. The findings refute the often-repeated claim that Britain is deeply divided over Brexit: in reality, both leavers and remainers are broadly united behind a ‘hard’ Brexit on almost every major issue. The study, seen by BuzzFeed, shows:

  • 67% of people surveyed prefer the so-called “no deal” outcome to a ‘soft’ Brexit
  • 68% of people surveyed would choose a ‘hard’ Brexit over a ‘soft’ Brexit

Remain voters tend to support so-called ‘hard’ Brexit positions on most major negotiation points:

  • The majority of remain voters oppose the continuation of free movement. Instead, they tend to back ‘some’ or ‘full’ control over UK borders, even if that means lower EU immigration levels than now;
  • Remain voters do not want the UK to be subject to ‘all EU laws and all ECJ decisions’;
  • Remain voters tend to support paying a smaller rather than larger divorce bill to the EU, and would support paying no bill at all;
  • Remain voters do not support continuing massive payments to the EU;
  • Labour, SNP, Plaid Cymru, and Lib Dem voters only marginally preferring a ‘soft’ Brexit to a ‘no deal’ outcome (by around 60/40).

Professor Sara Hobolt of the LSE said:

“Overall… there is on aggregate higher levels of support for outcomes that resemble the ‘hard Brexit’ position put forward by the government. Remain voters are willing to acknowledge that there are key negotiation outcomes – e.g. limits to freedom of movement – that they may not like, but that these outcomes still respect the referendum vote and are therefore legitimate. In other words, Remain voters concede that the features that lead them to prefer a particular negotiation outcome do not, in fact, respect the referendum.”

The study will be seen as a bodyblow to the metropolitan remoan class whose views are evidently not shared by the country as a whole. This exposes die-hard remainers as having the extreme position relative to the ordinary population. In all but 11 of 42 possible Brexit scenarios presented to the 3,293 participants, remain and leave voters were within five percentage points of one another. Conclusive proof that the public backs Brexit…

Stephen Kinnock’s Pass Rant Fails

BuzzFeed ran a piece this morning quoting remain campaigner Stephen Kinnock, who was very upset about the fact that BrexitCentral has a parliamentary pass. The briefest glance at Kinnock’s own pass allocations shows he’s a fine one to talk. Forget journalists – the Aberavon MP inexplicably dished out a pass to Dennis Marcus, director of “strategy and communications” company Ubuntu London. The firm’s website boasts about Dennis’s work:

“Always having a lot of both to offer, he helps you find your most powerful stories, be they in the form of strategy (as he has done for global businesses and major international political campaigns), speeches (for former Heads of Government and leading business executives), copywriting (for businesses and thought leaders) or scripts (for production companies and a former Prime Minister).”

And thanks to Stephen, he enjoys unlimited access to Parliament. Pass fail!

Buzzfeed Accuse Corbyn of Lying

Team Corbyn have banned Buzzfeed from covering the rest of Labour’s election campaign after taking exception to yesterday’s interview with the dear leader. Corbyn denied to the BBC that he told Buzzfeed he would stay on regardless of the election result. Buzzfeed has released an audio recording and transcript of the interview, essentially accusing Corbyn of lying to Laura Kuenssberg:

Buzzfeed: “Forgive me for asking this, I know you’re in to win it. But if it goes wrong, if for whatever reason in a month’s time you don’t get to walk into Downing Street, is this the one shot that people have to vote for Jeremy Corbyn?”

Corbyn: “I was elected leader of this party and I’ll stay leader of this party.”

Buzzfeed: “So you’re going to stay leader of this party, no matter what happens?”

Corbyn: “I’m carrying on.”

Not the sharpest media strategy from Team Jez – the interview was painstakingly fair, better coverage than Corbyn would get anywhere else, and Buzzfeed readers are his target audience. Well done Corbynistas! 

Buzzfeed Go to Court to Demand Journalist Reveals Communications With Sources

Buzzfeed has gone to court in the US to attempt to force the editor of British media trade website Press Gazette to reveal his journalistic sources. A motion filed by Buzzfeed in a New York court seeks to compel Press Gazette’s editor, Dominic Ponsford, to provide material in relation to this article he published in April 2015, a report about a Buzzfeed investigation doing in one of its rivals. Buzzfeed’s court application seeks to force Ponsford to reveal:

  • The research and production of the the 24 April Press Gazette report
  • Communications prior and post publication of the article between Press Gazette and the alleged source

Ponsford says:

“Why is Buzzfeed interested in my emails and any other documents I may hold? As a journalistic organisation does it not understand the dangerous ethical territory it is entering here?”

Remarkable behaviour for a news organisation employing journalists. What are Buzzfeed thinking?

Buzzfood: Quarter of Buzzfeed UK’s Most Read Stories Are About Food, None About Politics

This is what happens when algorithms decide your news agenda…

BuzzFood

Buzzfeed’s top trending stories feel a bit ‘samey’, formulaicly bland with a made-on-a-production line ‘taste’. These are from their UK top trending 20 at the time of going to pixel. Is it Guido or are they running out of ideas?

The headlines will no doubt have been run through a data driven algorithm and optimised to death for SEO and clickbait performance. Are they actually native advertising? (Buzzfeed has got into trouble for running unflagged adverts as editorial in the past.) Pizza, Nandos, Subway, McDonalds – Guido just put those words in the text to see if we too get a load of trash traffic. Does Chipotle even have a restaurant open in the UK?

UPDATE: Chipotle apparently does have restaurants in the UK and this just in at 5:

CNN Dumps on Buzzfeed

CNN has condemned Buzzfeed for publishing the unverified Trump dossier and spoiling their more careful reporting of allegations against the President-Elect:

“CNN’s decision to publish carefully sourced reporting about the operations of our government is vastly different than Buzzfeed’s decision to publish unsubstantiated memos.

[…] Read the rest

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