BuzzFeed shareholders have urged the company’s CEO to shut down its award-winning, money-losing news division: report

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Several BuzzFeed shareholders have urged the company’s CEO to shut down its entire award-winning news division because it was losing money, CNBC reported Tuesday.

In its first earnings call as a public company on Tuesday, BuzzFeed announcement it laid off 1.7% of its workforce following the acquisition of Complex Networks and calls for voluntary takeovers in its news division.

CEO Jonas Peretti said the layoffs largely affected the company’s administration and business units, BuzzFeed’s video team and Complex’s editorial team.

Three newsroom heads, Managing Editor Mark Schoofs, Associate Editor Tom Namako, and Investigations Editor Ariel Kaminer, also announced their departure from BuzzFeed News.

“It’s hard and painful work, but I don’t want to do it through layoffs in News if it can be avoided,” Peretti said, according to a recording of the call. obtained by Insider.

He added that the company would continue to operate in the news division, “but I will no longer subsidize it with income from other divisions, and that’s a change from the past.”

“We have done this for many years, but now we need to turn information into a sustainable business,” he said.

People familiar with the conversations told CNBC that several large investors in the company pushed Peretti to cut its money-losing news division. BuzzFeed News, which has about 100 employees, is losing about $10 million a year, according to two of the sources.

An investor told CNBC that shutting down the company’s news division could add up to $300 million to BuzzFeed’s total stock value.

Representatives for BuzzFeed and BuzzFeed News did not immediately return Insider’s request for comment.

The company reported an 18% increase in revenue in the fourth quarter of last year, according to a statement, but its earnings before interest, taxes, depreciation and amortization fell 12% to $34.2 million. Revenue from BuzzFeed’s 4Q trade also fell 26% to $16.7 million.

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