At the end of a staff-wide video call in early October about improving diversity, BuzzFeed Chief Executive Jonah Peretti revealed some good news: The company is on target to break even this year for the first time since 2014.
What was left unsaid is how BuzzFeed got there. Revenue is expected to come in significantly lower this year than in 2019, according to people familiar with the company’s performance, largely because of severe pressure on the advertising market in the early days of the coronavirus crisis.
But BuzzFeed more than offset that decline with around $30 million in cost cuts, through a mix of furloughs, pay reductions, layoffs and other changes meant to stabilize the company’s finances through the pandemic, the people said.
That belt-tightening is part of a greater reckoning for the once-highflying digital media startup, whose board had become increasingly frustrated with slowing growth and persistent losses in recent years, the people said. Over the past two years, the company has reduced costs by as much as $80 million, they said.
BuzzFeed’s situation is typical of the broader digital media landscape. Companies that once put their faith in unstoppable revenue growth have had to adapt to a new reality—humbled first by the challenge of competing against digital advertising goliaths Facebook Inc. and Alphabet Inc.’s Google, and then by the pandemic. Now, many publishers are moving to cut costs and seeking mergers to put themselves on stronger footing.