Buzzfeed, other outlets cut jobs in challenging market

When it debuted in 2006, BuzzFeed quickly became a social media sensation. Its listicles, quizzes and funny videos went viral and created a huge audience online. The New York-based start-up later hired hundreds of journalists to do serious journalism, creating a platform that many saw as the future of the industry.

But the digital media trailblazer confronted some harsh realities in the last week when as many as 250 workers, including roughly 75 employees in Los Angeles, lost their jobs.

Shedding 15 percent of its staff was a bruising moment for BuzzFeed and the latest sign of distress in the oncebooming digital media sector, where many outlets have struggled to capture enough ads and digital subscriptions to cover rising expenses.

Some analysts and former employees say BuzzFeed was hurt by its large ambitions, staffing up too quickly and becoming overly reliant on growing its audience through publishing platforms like Facebook. But the problems also reflect deeper challenges that have squeezed many other digital media sites that pursued a similar business model, one based on building a large following on Facebook and YouTube and selling that viewership to advertisers, analysts said.

"They’re all built on the ... principle that we can amass a great multiplying audience and we can sell those eyeballs to advertisers,” media analyst Ken Doctor said. The model is “broken at this point.”

Last year, digital media companies including Vox Media Inc., Refinery29 and Mic slashed payrolls. Vice Media last week confirmed it will eliminate about 250 jobs, or 10 percent of its workforce. Verizon Media Group, which includes properties like the HuffPost and TechCrunch, also recently announced it would cut 7 percent of its workforce. That affected more than 100 employees in offices in Sunnyvale and San Francisco, according to notices filed with the state’s labor department.