- BuzzFeed's board approved a restructuring plan that will reduce the workforce by about 35%, sending shares up 13.3% in premarket trading.
- The digital media company aims to achieve profitability through significant cost-cutting, though execution risks remain.
- The move follows a series of layoffs and asset sales as BuzzFeed grapples with a challenging digital advertising market.
BuzzFeed Inc. shares rose 13.3% in premarket trading after the digital media company said its board approved a plan to reduce its workforce by nearly 35%. The restructuring is part of a broader effort to cut costs and move toward profitability, according to people familiar with the matter.
The company, which operates news, entertainment, and branded content businesses, has been under pressure from declining digital advertising revenue and shifting consumer habits. The layoffs are expected to affect a significant portion of its staff, though specific numbers were not disclosed. BuzzFeed has previously implemented multiple rounds of layoffs, including a 12% reduction in 2022 and a 15% cut in 2019.
“This is a painful but necessary step to position the company for long-term success,” a spokesperson said in a statement, declining to provide further details. Attempts to reach CEO Jonah Peretti for comment were unsuccessful.
Investors appeared to focus on the potential cost savings, which could help BuzzFeed achieve its goal of positive free cash flow by the end of the year. The company has been working to diversify revenue through e-commerce and licensing, but those efforts have yet to offset declines in its core advertising business.
The restructuring plan comes as other digital media companies, including Vice Media and Vox Media, have also announced layoffs or asset sales amid a broader industry consolidation. BuzzFeed’s stock, which has lost more than 70% of its value over the past year, remains volatile.
Correction: A previous version of this article misstated the percentage increase. The correct premarket gain is 13.3%.