BuzzFeed‘s layoffs for 2017 added about 100 more people to the year’s total. The Internet media company plans to reduce its U.S. staff by about seven to eight percent, as it will likely miss its revenue goals for 2017.
These digital media company layoffs are also part of a growing trend of news organizations created in the digital age now struggling, not unlike their print media forebearers.
Digital media company revenue declines are seen as a function of declining advertising revenue, which is the result of the increasing presence of Alphabet Inc (NASDAQ:GOOG) and Facebook, Inc. (NASDAQ:FB) in the digital advertising realm.
The BuzzFeed revenue decline that prompted these late layoffs is part of the difficulty that the industry as a whole is facing, with hundreds of digital media company layoffs taking place throughout 2017 at some of the largest news organizations in the world.
BuzzFeed Layoffs to Affect the Business Team as Ad Revenue Declines
The BuzzFeed job cuts are being instituted following the company reportedly falling 15%-20% short of its $350.0-million revenue target for the year, according to The Wall Street Journal.
The latest 100 job cuts are all members of the sales. BuzzFeed employs 1,700 people.
“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 to support these new lines of business,” Jonah Peretti, BuzzFeed CEO and co-founder, wrote in a memo to staff. “Unfortunately, this means we have to say goodbye to some talented colleagues whose work has helped us tremendously.”
“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,” he added. “We’re going to continue to aggressively build out our advertising capabilities, but also accelerate this evolution in 2018.”
Alongside the BuzzFeed marketing team job cuts, Greg Coleman is stepping aside as president. Coleman is an ad-world veteran and will remain on as an adviser to the company.
The most recent BuzzFeed layoffs for 2017 come while the company finds itself in flux, searching for a new chief operating officer and looking to fill a number of high-level business roles as it continues to diversify its revenue stream. The diversification, however, was not enough to help reach BuzzFeed’s revenue goals for 2017.
Facebook & Google Dominate Digital Advertising as Digital Media Companies Struggle in 2017
The elephants in the room for many digital media companies operating in the current environment are Google and Facebook.
Combined, the two companies dominate online advertising, which fuels the digital media market. The companies combine for a 63% share of digital ad dollars, according to an estimate from eMarketer.
The digital media companies’ revenue decline, which has led to layoffs in organizations like Vice Media and Oath Inc., the successor to Yahoo! News and owned by Verizon Communications Inc. (NYSE:VZ), is an industry-wide problem.
While traditional print media continues to struggle with its own advertising obstacles, it seems now that the shoe is on the other foot, as digital media outfits are finding themselves battling the same problems they brought on to their predecessors. Papers across the country have long been adapting to the advent of digital news media sucking away ad revenue via online platforms. It may now appear that digital media companies must also find a way to cope with the threat of Facebook and Google.
Digital media companies’ layoffs for 2017 have numbered in the hundreds and hit multiple companies, with the latest round of BuzzFeed layoffs for 2017 simply being another addition to a list that seems to grow with each passing year.
“BuzzFeed Plans Job Cuts, Business Reorganization After Revenue Miss,” The Wall Street Journal, November 29, 2017.
“Digital media layoffs continue, this time at VICE News,” Poynter, May 24, 2016.
“Digital media meltdown: Troubling outlooks for BuzzFeed, Mashable, Oath, and Vice,” Fast Company, November 16, 2017.