BuzzFeed has announced a series of redundancies at HuffPost, as it seeks to streamline operations ahead of an expected public offering.
The shock news comes just weeks after the entertainment brand acquired HuffPost from Verizon Media. It dovetails with a pending merger with acquisition specialists 890 5th Avenue Partners, which would open the door for a public offering of BuzzFeed.
What is going on at BuzzFeed?
Since 2006 BuzzFeed has established itself as a popular digital-media outlet built on organic growth.
With its acquisition of HuffPost in February, a new strategy of expansion through acquisition was adopted – but BuzzFeed will require a significant injection of cash to fund further growth.
A suggested merger with 890 5th Avenue Partners – a special purpose acquisition company – is on the cards, paving the way to the stock market and much-needed capital.
What are the implications for HuffPost?
Caught in the middle of these machinations is HuffPost, which is bearing the brunt of a brutal restructuring, including the closure of HuffPost Canada.
Key figures including executive editor Hillary Frey and Louise Roug, executive editor for international, have bee laid off as part of a broader restructuring that will see 47 roles lost – including eight in management.
Justifying the need to act, chief executive Jonah Peretti said: ”Though BuzzFeed is a profitable company, we don’t have the resources to support another two years of losses.”
The coronavirus pandemic has accelerated a shift in digital advertising spend toward Google and Facebook, hitting titles such as BuzzFeed and HuffPost.
Peretti has sanctioned an aggressive programme of efficiencies and cost savings while also seeking out new partners and funding streams to adjust to the new reality.