In the first major restructuring move of Byron Allen‘s ownership tenure, BuzzFeed, HuffPost and Tasty are set to undergo a significant round of layoffs, with some 180 staffers to be given pink slips, The Hollywood Reporter has learned. BuzzFeed had approximately 510 employees prior to the cuts.
“Today we are making important changes to BuzzFeed that are required to put our business on apath to profitable and sustainable growth,” read a memo from the company’s leadership to employees on Monday. Four months ago, in our March earnings call we stated a substantial doubt about the company’s ability to continue as a going concern.Fortunately after that public announcement, Byron Allen quickly stepped in and made an investment of approximately 26 million dollars into BuzzFeed to stabilize, protect, and grow the company.”
In a $120 million agreement unveiled in May, Allen took a 52 percent majority stake in the company as well as the CEO role from founder Jonah Peretti, funded by $20 million in cash and $100 million in the form of a promissory note due five years after deal close.
The move was alternately characterized as either a lifeline to the Millennial media company or a decision of last resort given BuzzFeed’s cash crunch as a publicly traded firm. In its latest quarter, BuzzFeed reported a nearly 20 percent decline in advertising revenue year-over-year. The company’s net loss for the quarter was $15.1 million, up from $12.5 million last year. BuzzFeed is set to report its next earnings disclosure on August 4.
