BuzzFeed is restructuring its advertising sales and business operations to pull away from an over-reliance on native advertising, a move that will see it cut 8% of its workforce.
According to the Wall Street Journal, around 100 employees will be let go, with the cuts primarily coming from the business and sales side of the organization, although some editorial staffers in the UK will also be let go.
The digital media publisher employs about 1,700 people globally.
The cuts will form part of BuzzFeed's efforts to diversify its revenue streams outside of native advertising. In August, it dropped its longstanding opposition to conventional digital banner advertising in a bid to make it less reliant on driving traffic to promoted posts.
Programmatic will be a significant focus for the business going forward, as well as ecommerce, video licensing, and development, including the creation of a number of new lifestyle verticals modeled after its food product, Tasty. These will fall under three new divisions: BuzzFeed Media Brands, BuzzFeed Commerce and BuzzFeed Studios (a rebrand of its film and TV, BuzzFeed Motion Pictures).
In BuzzFeed's first full accounts for its UK office, which employs 204 staff, it claimed to have doubled turnover but also increased its losses from £109k in 2015 to more than £3.5m in 2016.
Globally, the publisher is set to miss its revenue target of about $350m this year by some 15% to 20%, forcing it to put its plans for 2018 initial public offering on hold, the WSJ reported.
A BuzzFeed spokesperson from the UK confirmed the job cuts: “We’re restructuring our UK operation to put it on a faster path to profitability, and expand its focus to include news and entertainment reporting for our global audience.”
The spokesperson continued: "We’re restructuring our business org to reflect the resources and expertise need to support our expanded client offering. Offerings like media, programmatic, low-touch products, and strategic partnerships will in some cases require less staff, and in other cases require us to bring in different talent profiles."
Jonah Peretti, BuzzFeed’s co-founder and chief executive, said in a memo to staff: "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.
“Our business is more diverse and balanced than it was a year ago and, very importantly, for the first time a quarter of our annual revenue will come from sources other than direct sold advertising."
However, Peretti added that it would continue to "aggressively build out our advertising capabilities, but also accelerate this evolution in 2018.”
As part of the restructuring, Greg Coleman, who has served as BuzzFeed’s president since 2014, will step aside, but remain an adviser to the company. The search has already begun for a chief operating officer and it is looking to fill a number of other high-level business roles.
BuzzFeed’s chief revenue officer, Lee Brown, will become part of the company’s senior management team, reporting directly to Peretti.
News of the cuts comes as digital media’s darlings begin to lose their lustre, evidenced most recently by Mashable’s sale to Ziff Davis for just $50m, a drop of 80% from its $250m valuation last year.