It’s been a big day for Buzzfeed (NASDAQ:BZFD), and it’s just getting started. Shares of the popular digital media company are up more than 70% today after the company confirmed the sale of its Complex division to e-commerce giant NTWRK. This $108.6 million all-cash deal is definitely the catalyst that BZFD stock needs to finally start rising again after a difficult year.
However, the sale isn’t the only headline that is impacting BZFD stock. The company has also announced plans to lay off 16% of its workforce as part of a strategic restructuring initiative. While news of the Buzzfeed layoffs is likely being overshadowed by the sale, investors shouldn’t write this development off. This new focus on growth could be exactly what the company needs to finally usher in a much-needed turnaround.
BuzzFeed Layoffs 2024: What to Know
If news of BuzzFeed layoffs feels like deja vu, that’s because it is. In April 2023, the company announced a 15% workforce reduction as it shut down its BuzzFeed News division. These job cuts amounted to the loss of roughly 180 staff members. CEO Jonah Peretti cited an inability to continue funding the venue as a standalone news organization. This led to BuzzFeed shifting its focus to HuffPost (formerly The Huffington Post), which currently operates as its only traditional news venture.
Now, BuzzFeed is moving forward with a new growth plan that centers around the company’s titular BuzzFeed and HuffPost, as well as food-centric venues First We Feast and Tasty. As of now, few details regarding the most recent round of Buzzfeed layoffs have been provided. Per The Hollywood Reporter:
“The specific details of the new restructuring will be released on Feb. 28 (that is also when employees will be notified), though the company says it expects annualized cost savings of $23 million under the plan. Peretti said in his email that HuffPost, Tech, BuzzFeed Studios, Tasty, First We Feast (including Hot Ones), and International will not be impacted by the cuts, which will total a little under 160 people.”
How will this impact BZFD stock? The short answer is that we won’t know until the dust settles from the Complex sale. When the momentum from this news dies down, investors will be better able to assess what the BuzzFeed layoffs will mean for share prices.
Since November 2021, BZFD has fallen considerably, shedding more than 95% of its value. While it currently trades at penny stock levels, investors who can stomach some risk may see this as a key buying opportunity. The company is clearly focused on growth, and it is taking steps to show investors that it can make important changes.
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On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
