BuzzFeed sells Complex as digital empire shrinks, staff cut by 16%

new york
CNN
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BuzzFeed on Wednesday sold Complex to NTWRK, an e-commerce company specializing in collectibles rooted in street culture, further shrinking Jonah Peretti’s struggling digital media empire once synonymous with virality and the social media age. It became a deal.

BuzzFeed sold the majority of Complex Networks, which it acquired three years ago for $300 million, for $108.6 million, as the company announced a “planned strategic restructuring” to “improve the company’s profitability.” This is due to the company’s announcement that it will lay off 16% of its workforce next week. ” and “centralized cost reduction.”

BuzzFeed will maintain its food-focused brand First We Feast, which produces the YouTube series Hot Ones, and operate it independently along with its other brands BuzzFeed, HuffPost and Tasty.

“The sale of Complex represents an important strategic step for BuzzFeed, Inc. as we adapt our business to be more profitable, more agile, and more innovative,” said BuzzFeed’s Chief Executive Officer. Director Peretti said. “This is also an opportunity to unlock greater value for the Complex brand by combining it with his NTWRK’s expansive, commerce-driven business.”

The union of NTWRK and Complex is like a natural marriage. NTWRK serves as a marketplace for many of the items featured on Complex, including sneakers. Combining these, NTWRK said it wants to “build the definitive cultural commerce, content and experience platform.”

While NTWRK’s acquisition of Complex brings together two similar companies that could be complementary from a business perspective, BuzzFeed’s separation from Complex is a sign that BuzzFeed is parting ways with Complex, which once sought to redefine the Internet. This reflects the retreat of high-flying digital publishers.

Digital publishers have struggled in recent years, enduring fierce industry headwinds, a weak advertising market, plummeting social media referral traffic and the looming threat of artificial intelligence.

BuzzFeed was something of a poster child for this struggle among digital publishers. After launching its initial public offering in 2021, the company’s stock price fell an astounding 98%, trading at a perilously low 21 cents on Wednesday.

The collapse of BuzzFeed’s digital empire has rapidly come to public attention in recent years, as the company has undergone several rounds of cost cuts and layoffs.

In April, BuzzFeed shut down BuzzFeed News, its award-winning news division that once had hundreds of employees and bureaus around the world. The outlet has not been shy about its goal of upending traditional news outlets like the New York Times and CNN, which have been slow to transition into the digital age.

According to recent reports, BuzzFeed’s cost-cutting efforts aren’t over yet. Reuters reported last week that The Independent was in talks to take control of the company’s UK operations.

BuzzFeed said the sale of the complex allows for “a meaningful step towards strengthening our balance sheet and improving liquidity.”

“The changes we are announcing today allow us to move into an exciting next phase with an even greater focus on our iconic brands: BuzzFeed, HuffPost, First We Feast, Hot Ones and Tasty.” An efficient cost structure and operating model. The ability to leverage AI and interactive content formats to accelerate innovation,” Peretti said. “We look forward to sharing more in the coming months.”

Investors in the NTWRK-Complex deal include Universal Music Group, record executive Jimmy Iovine, Goldman Sachs and Main Street Advisors.

Universal Music Group will also serve as a strategic partner, working to identify ways the new platform will “offer unprecedented opportunities for both music superfans and artists.” The partnership is a sign that Universal Music Group is looking for new platforms to collaborate with, and is especially noteworthy given that the company recently announced a formal break with TikTok.

Editor’s note: This article has been updated with additional information.