Many of the members of BuzzFeed’s newsroom feel as if they were sold a bill of goods.

The digital media stalwart opened itself to the stock market in late 2021, reposturing itself as the torchbearer for the rest of its startup peers. Vice, Vox, and Bustle all flirted with the idea of public investment to varying degrees over the years, but BuzzFeed was among the first to take the plunge, latching onto an SPAC deal, and selling shares of itself for $10 at the opening bell.

This was to be the new model for an industry that is constantly in search of financial salvation — yet another method to keep the creditors satiated — but in retrospect, the writing may have been on the wall from the very start. BuzzFeed CEO Jonah Peretti reportedly claimed that the company would rake in $520 million in revenue in 2021. At his first earnings call last month, that number was eroded down to $398 million. Today a BuzzFeed share sits at $5.18, about half its initial value.

You likely know the story by now. On the morning before that earnings call, BuzzFeed management unveiled a stark contraction of its Pulitzer-winning news department in an internal memo to employees. Three top BuzzFeed News editors were resigning, and about 35 employees are being offered voluntary buyouts. In total, BuzzFeed looks to shed 1.7% of its staff as the business seems to reorient around a single priority: Revenue.

“Under Jonah’s leadership, the company has subsidized BuzzFeed News for many years,” read one particularly cruel quote, per The Daily Beast (emphasis mine). “[The] next phase is for BuzzFeed News to accelerate the timeline to profitability and undergo a strategic shift so that we will get there by the end of 2023.”

When the dust cleared, it was increasingly evident how close BuzzFeed News might have come to a mortal blow. CNBC reported that major shareholders encouraged Peretti to clean out the news reporting staff entirely, as a way to juice maximum revenue through attrition — ostensibly returning BuzzFeed to the shoestring viral-content shop it was more than a decade ago. BuzzFeed News was formed in 2011 and offered the site an outsized dose of prestige journalistic credibility, steadily nudging the site’s reputation away from Harry Potter quizzes by, say, publishing the Steele dossier or uncovering the Kevin Spacey grooming allegations. The staff is only guilty of doing their jobs.

“Investors can’t force me to cut news, and the union can’t force me to subsidize news. I am committed to news in general and [BuzzFeed News] in particular. I’ve made the decision that I want News to be break-even and eventually profitable,” wrote Peretti, in an internal email sent to BuzzFeed staffers reviewed by Nieman Lab. “We won’t put profits ahead of quality journalism and I’ll never expect [BuzzFeed News] to be as profitable as our entertainment divisions. But we can’t keep losing money.”

That may be the most depressing part of the whole debacle: Many of us had wondered whether a massive infusion of shareholder money would be compatible with the prerogatives of a fleet of reporters disengaged from the cynical traffic economy. So far, it seems, we had the right to be worried.

“Jonah vowed up and down that this would not hurt us, that this would not be the thing that puts us in this place,” said a BuzzFeed News staffer who asked to remain anonymous for this story. “Maybe those promises were true for a few months, but then the shareholders said that they didn’t want to spend the money on news.”

BuzzFeed News employees will likely remain in a state of paranoia until the other shoe drops. Peretti may have warded off the vultures this time around with some leadership shakeups, overhead shrinkage, and promises to redouble profit maxims, but who knows what happens at the next earnings call? “[There’s] concern about how much pressure our CEO is willing to withstand before he caves and axes us completely, which is an insane way to operate in the first place,” said another BuzzFeed News employee. Peretti addressed those anxieties in the same internal email.

“My hope is that we don’t have to do this again, and that’s because of the change in approach that we started this week,” he wrote, in response to a question about whether the staff can expect more layoffs in the future. “For many years, News received more support than any other content division and over the years was allowed to spend 9-figures more than it generated in revenue. I still support News and value News, and I don’t want to have to cut back in News when we make new investments in other divisions. That’s why I want to transform News into a sustainable business, while continuing to do impactful, important journalism. I know this is a big shift and will require us to operate differently. We will set News up for success so News can become a stronger financial contributor to the overall BuzzFeed, Inc. business.”

If the last 20 years of layoffs, pivots, and foreclosures have taught us anything, it’s that running a sustainable, conscientious news organization without the presence of heavyweight shareholders is already exceedingly difficult. So, as the specter of the stock market looms, as more digital media shops barrel toward an SPAC or an IPO, as we witness just how quickly much of BuzzFeed News was sundered, those boardrooms need to start asking themselves some difficult questions. Do the desires of the Wall Street class align with the priorities of good news reporting? Do they even know what good news reporting is in the first place?

“I don’t know how to convince a person that news has inherent value, but that’s the truth of the matter. It’s a crucial good in the world that protects democracy, and people’s health and welfare,” said a BuzzFeed News employee. “It’s so valuable in ways that you’re not always going to see cash coming in from. But if you’re in this business, you have to decide that you want to be in this business. You have to commit to it.”

That’s the problem, of course. The megarich rarely invest in assets due to a conviction in their social cause. The goal, most of the time, is to grow and extract — even when the quickest way to growth is to slash a company’s overhead. Mark Stenberg, who covers the business of journalism for AdWeek, is not certain how many off-ramps are available for the ascendent digital media enterprises of the early 2010s. After all, the Bustles and Vices of the world all received massive infusions of seed funds from various well-heeled investors, and that bill comes due, eventually. Yes, enthusiasm for NASDAQ-listed newsrooms has tapered off since 2020 when it seemed as if those public listings were imminent, but Stenberg asked me to consider the mindset of the CEOs who spent years promoting their lucrative projections to a legion of wealthy partners and now find themselves running out of runway. From that perspective, a public offering appears compulsory.

“In some senses, ownership got investors based upon the premise that someday those investors will get that money back. From an organizational standpoint, it doesn’t seem like a decision. If they take the money, they have to go public,” said Stenberg. “But if you’re a reporter, and you’ve seen how negatively this has affected BuzzFeed, maybe that affects where you decide to go work.”

Stenberg is alluding to one contingency that could stem the tide. Media members everywhere are aware of the carnage wreaked by BuzzFeed’s SPAC, and the outrage will only become more fervent if Peretti and his investment team follow through on some of the more draconian cost-cutting options to grease flagging stock numbers. There’s a burgeoning disbelief among workers that a financial ambition built around exponential, unshackled growth will ever gel with the reasons people want to work in the media — a precept perhaps best embodied by Deadspin’s rebirth into Defector, an employee-owned co-op built around the idea that they’ll never be asked to sell themselves in order to make someone else rich. 

“I don’t think it’s inherently bad for a media company to want to scale and grow, nor do I think that is a business model that is incompatible with producing good journalism,” said Tom Ley, editor-in-chief of Defector. “The problem is in why such scale and growth is being pursued. If the idea is to make a big media company and earn a ton of money for the sake of employing lots of journalists and producing lots of good work, then scale away. But if the idea is to make a big media company and earn a ton of money just so that a few big investors can eventually hit the eject button and get out of there with a nice rate of return, that’s when you are going to run into an incompatible arrangement between the business itself and the people who want to do some good work for the business.”

Stenberg believes that the former philosophy might start to infect other, more profit-oriented companies that are trying to recruit new talent. A good retention tool is to promise that one’s position will not come to be regarded as disposable by a cabal of shadowy investors. At the end of the day, most journalists want to write stories without feeling as if they’re constantly being monitored for pecuniary efficiency. Should that be so hard to pledge?

“I wonder if companies might start saying, ‘Hey, we don’t have plans to go public, so you won’t ever feel like you’re under that pressure,’ It’s a far cry from the heyday of venture-backed media of a decade ago, where people were saying, ‘If we go public we can make all this money,'” said Stenberg. “I think this conversation is leading to a world where it’s rarer that going public is going to be a good idea for a news company. Growing every quarter is really difficult, especially for the news industry. And you see how that manifests at BuzzFeed when they say, ‘Lop off the unprofitable part.'”

For what it’s worth, BuzzFeed News employees have the benefit of a strong union that was forged before the company’s NASDAQ era. They’ve ratified a contract after more than two years of bargaining. That doesn’t guarantee them immunity from avaricious stockholders, at least not yet, but hey, leverage is leverage. If the slow creep toward stock-market finance in digital media is inevitable, at least the workers under the gun are finding their voice at the right time. Hopefully that message spreads across the industry.

“I absolutely think other unions should be talking about what going public would mean for them and the future of their newsrooms,” said a BuzzFeed News staffer. “So far, it doesn’t bode well for us.”