Two months after Byron Allen closed his purchase of BuzzFeed, the online publisher said it plans to cut a hefty 35% of staff and dedicated contractors across its brands.
“The reduction in workforce plan is intended to advance the company’s path towards profitability and positive cash flow generation by streamlining its organizational structure, optimizing operating expenses, and preserving cash,” BuzzFeed said in an SEC filing Monday.
The company has just north of 500 staffers.
Allen’s family office acquired 51% of the outstanding shares of publicly traded BuzzFeed, whose assets include HuffPost and Tasty, in a deal worth $120 million. Allen is chairman and CEO. Co-founder Jonah Peretti transitioned from chief executive to a new role as President of BuzzFeed AI. Allen founded and runs Allen Media Group.
Watch on Deadline
“Today we are making important changes to BuzzFeed that are required to put our business on a path to profitable and sustainable growth,” said a memo to staff from the BuzzFeed Leadership Team.
“We’ve been actively managing costs for some time, working through scenarios to save as many jobs as possible. Unfortunately, the elimination of certain roles is still required. Today’s changes include the elimination of positions across the entire company,” read the memo obtained by Deadline.
“BuzzFeed is well-positioned for growth, especially in free streaming. BuzzFeed Studios will operate as its own entity consolidated under BuzzFeed, Inc., enabling us to maximize synergies across the broader portfolio and secure further investment. Content and Tech teams will be keenly focused on maximizing audience engagement, revenue, and profitability.”
The SEC filing anticipates $6.5-$8.5 million in restructuring charges in the third quarter in connection with the layoffs as well as annualized savings of approximately $29 million-$32 million.
BuzzFeed will report second quarter earnings August 4.
The sale called for Allen Family Digital to acquire 40 million shares of BuzzFeed at a price of $3 a share for a total purchase price of $120 million. The transaction was funded with $20 million in cash at closing and a $100 million promissory note due five years from closing, accruing interest at 5% annually. BuzzFeed used $12.5 million of the cash proceeds to pay down debt.
