BuzzFeed announced plans to lay off dozens of employees after offloading Complex Networks at a significant discount.
The struggling digital media group, which also owns HuffPost, said it would reduce its remaining workforce by 16% as part of a strategic restructuring. This will save the firm about $23m a year, it said.
It sold most of Complex, a publisher focused on streetwear and pop culture, to Ntwrk, an e-commerce group, for $108.6m – just over two years after buying the business in a $294m deal. BuzzFeed will keep hold of First We Feast, maker of the popular video series Hot Ones.
The company plans to use proceeds from the sale to strengthen its balance sheet and pay down debt.
Jonah Peretti, CEO of BuzzFeed, said in a press release: “The sale of Complex represents an important strategic step for BuzzFeed, Inc as we adapt our business to be more profitable, more nimble, and more innovative.”
Shares in BuzzFeed have battered since striking a $1.5bn deal to go public in 2021. It was valued at just $31.5m on the stock market ahead of Wednesday’s announcement, although its shares rallied some 130% during out-of-hours trading.
The sale of Complex and job cuts “will enable an exciting next stage for our company”, focused on BuzzFeed’s remaining brands including HuffPost, Hot Ones, and Tasty, and with “a more efficient cost structure and operational model”, Peretti said on Wednesday. “I look forward to sharing more in the coming months.”
It comes less than a year after BuzzFeed shuttered its Pulitzer Prize-winning news operation, laying off dozens of employees.
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Employees affected by the layoffs will be notified next Wednesday, Peretti said. “Digital publishers are facing multiple headwinds in the current market,” he wrote in a memo to staffers, “and our recent revenue performance reflects the fact that a bundled portfolio approach is not aligned with current advertiser or platform trends.
“More importantly, our performance does not reflect the value or future growth potential of our individual brands. The changes we are making to reduce the size of our business and administrative teams will position each brand to operate more autonomously.”