The latest buzz about BuzzFeed could be a buzzkill for investors. The New York-based media company has seen a recent defection of some of its top newsroom leaders ahead of expected staff cuts, which could further complicate a stock price that has been on a mostly downward trend.
Editor-in-Chief Mark Schoofs said in a staff email on Tuesday that he would be stepping down from BuzzFeed, The New York Times reported. Schoofs also said two other top editors would leave as well: Deputy Editor-in Chief Tom Namako; and Ariel Kaminer, executive editor of investigations.
In a separate email to staff on Tuesday, BuzzFeed Founder and CEO Jonah Peretti announced further job cuts across the company as it looks to rein in costs and accelerate profitability. Cuts are expected on the BuzzFeed video team and the editorial team at Complex Networks, a lifestyle publisher BuzzFeed bought in 2021. The business and administrative teams are expected to see staff reductions as well.
BuzzFeed has earned a lot of praise for its news operation — it won a Pulitzer Prize in 2021 for a series about China’s internment of Uyghurs — but the business side has been far less successful. The 11-year-old company has already had to trim staff and reduce operations over the past three years.
This week it reported its first financial results as a publicly traded company. Quarterly revenue climbed 18% from the prior year to $145 million, while profit rose 29% to $41.6 million, though that got a big boost from tax provisions and other accounting items. Current-quarter revenue is expected to drop in the low single digits, and BuzzFeed expects to record an adjusted quarterly loss of $15 million-$20 million.
The company’s stock price — which began trading in early December — has been a disappointment, mainly staying below $5 a share in 2022 following an opening-day high of $10.95. Shares closed up about 6% on Tuesday and pushed slightly higher early Wednesday before dipping again. The price is around $5.21 as of 10:15 AM EST.
Several large shareholders have urged Peretti to shut down the entire news operation, CNBC reported, citing unnamed sources familiar with the situation. One shareholder told CNBC that shutting down the newsroom could add up to $300 million of market capitalization to the stock.
But Peretti has put his focus on turning the division profitable through a leaner operation. Last year he laid off 70 HuffPost staffers after acquiring the brand from Verizon Media. Expect more cuts in the months to come.
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