Washington, Nov 29 (AFP) BuzzFeed said today it wascutting an estimated 100 jobs as the news and entertainmentwebsite reorganises its advertising efforts in the face ofdisappointing revenues.
The cuts will be mainly in the business and advertisingdivisions in the US operations, with a number of editorial andbusiness employees cut in Britain, a spokesman said,confirming an earlier report in the Wall Street Journal.
The reductions represent around eight per cent of its USworkforce and less than six percent of BuzzFeed's 1,700employees worldwide.
The move is part of a reorganization to diversify revenuein a difficult advertising market where online giants Googleand Facebook are dominating.
Jonah Peretti, BuzzFeed co-founder and chief executive,said in a memo to staff: "As our strategy evolves, we need toevolve our organization, too -- particularly our businessteam, which was built to support direct-sold advertising butwill need to bring in different, more diverse expertise."The Journal reported earlier this month that BuzzFeed --one of the most high-profile digital media operations whichhas been expanding globally -- had delayed plans for a publicshare offering and would miss its revenue target of USD 350million by 15 to 20 per cent.
A similar scenario is playing out at rival Vice Media,suggesting that digital news startups are facing tougher-than-anticipated growth.
BuzzFeed has built its business around so-called "native"advertising which is custom-made content designed to resemblenews, which is costly to produce.
This model saw some early successes but has floundered asonline giants scoop up ad revenues with "programmatic" adswhich are less expensive.
BuzzFeed has attracted investments including a USD 400million round from NBCUniversal at a valuation of some USD 1.7billion.
Digital media startups have seen expansion in recentyears, but their gains have only partly offset the declines inthe newspaper sector, according to recent studies.
Although startups like BuzzFeed and Vice have attractedcapital, it remains unclear if the digital sector can developprofitable business models. (AFP)DPB.
This is unedited, unformatted feed from the Press Trust of India wire.
