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BuzzFeed issuing more pink slips after selling Complex

A still frame from a web episode of the popular show "Hot Ones." (Courtesy image)
A still frame from a web episode of the popular show “Hot Ones.” BuzzFeed will retain the show and its production company, First We Feast, after selling former parent Complex Networks. (Courtesy image)

BuzzFeed is laying off around 16 percent of its global workforce as it works to trim costs amid a weak advertising market.

The plan was disclosed by BuzzFeed CEO Jonah Peretti in an email to staff on Wednesday.

“Digital publishers are facing multiple headwinds in the current market, and our recent revenue performance reflects the fact that a bundled portfolio approach is not aligned with current advertiser or platform trends,” Peretti wrote. “More importantly, our performance does not reflect the value or future growth potential of our individual brands.”

Peretti said it was imperative to “reduce the size of our business and administrative teams” so that each individual brand can “operate more autonomously.”

“Moving forward, we will focus on bringing each of our brands to market with a focus on their differentiation for our advertising and platform partners.”

Peretti did not disclose how many employees would be affected by the layoffs. It has fewer than 1,000 full-time and part-time employees across its various brands, which include its flagship website, BuzzFeed Studios, the Podcast “Another Round” and production company “The Try Guys.”

“Our overall revenue performance reflects the challenges of delivering against our bundled go-to-market strategy in a tighter digital advertising market,” Matt Omer, the Chief Financial Officer at BuzzFeed, said in a statement on Wednesday. “As a result, we have made the decision to reduce the size of our centralized operations enabling our individual brands to operate with more autonomy and deliver against their differentiated value propositions for advertisers.”

BuzzFeed is expected to discuss its layoff plans on February 28, according to a statement from the company. Last April, BuzzfEed implemented a round of layoffs that saw more than 180 people exit the company.

Also on Wednesday, BuzzFeed announced it sold Complex Networks to e-commerce group Ntwrk. The deal is valued at $108.6 million, BuzzFeed said, representing a $185.4 million loss compared to the $294 million BuzzFeed spent to acquire Complex Networks two years ago.

As part of the deal, BuzzFeed will retain some intellectual property from Complex Networks, including First We Feast, the production studio that produces the popular culinary-infused chat show “Hot Ones.”

BuzzFeed intends to use the proceeds from the sale of Complex Networks to pay down debt, the company said. Specifically, BuzzFeed intends to spend nearly $35.5 million to eliminate its revolving credit facility and redeem a portion of the company’s convertible notes due 2026, which will cost around $31 million.

The company also plans to set aside money from the Complex sale to finance the restructuring of its business for its post-layoff existence.

“The sale of Complex represents an important strategic step for BuzzFeed, Inc. as we adapt our business to be more profitable, more nimble, and more innovative,” Peretti said in a statement emailed to reporters on Wednesday. “This is also an opportunity to unlock greater value for the Complex brand by combining it with Ntwrk’s expansive, commerce-driven business.”

The remaining brands will include First We Feast, the Huffington Post (HuffPost), BuzzFeed and the food-centric Tasty.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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