BuzzFeed will cut 35% of its employees and dedicated contractors across its brands, two months after media entrepreneur Byron Allen completed his $120 million acquisition of the company, writes Deadline.
The online publisher announced the decision in a filing with the US Securities and Exchange Commission (SEC) on Monday, saying the move aims to improve profitability, generate positive cash flow and reduce operating costs.
The company, which employs just over 500 staff, said it will streamline its organisational structure, optimise expenses and preserve cash through the restructuring.
Allen’s family office acquired a 51% stake in BuzzFeed in a $120 million deal.
The company owns digital brands including HuffPost and Tasty.
Allen now serves as chairman and chief executive officer, while BuzzFeed co-founder Jonah Peretti has moved from chief executive to the newly created role of president of BuzzFeed AI.
In a memo to employees, BuzzFeed’s leadership said the company had spent months exploring ways to reduce costs while protecting as many jobs as possible.
However, it concluded that eliminating roles across the business had become necessary.
The company also said BuzzFeed Studios will operate as a separate entity within BuzzFeed Inc. to strengthen its focus on free streaming, increase collaboration across the business and attract further investment.
BuzzFeed expects the restructuring to result in charges of between $6.5 million and $8.5 million during the third quarter. It also forecasts annual savings of approximately $29 million to $32 million.
The company will release its second-quarter financial results on 4 August.
Under the acquisition agreement, Allen Family Digital purchased 40 million BuzzFeed shares at $3 each.
The deal included a $20 million cash payment at closing and a $100 million promissory note due in five years with annual interest of 5%. BuzzFeed used $12.5 million of the initial cash proceeds to reduce its debt.
