The layoffs of BuzzFeed and the false promise of "unions are not for us"



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Things may have looked bad for a year, but we are entering an even darker age for the media industry.

Two of the biggest digital news –HuffPost and BuzzFeedAnnounced last week sweeping the layoffs that affected nearly 1,000 employees. Now more than 400 BuzzFeed The writers are asking the company for better compensation after it has refused to pay them for the time gained. "[F]or a company that has always prided itself on treating its employees well, we unequivocally believe that this is the only justifiable choice, "the employees wrote in Medium, begging the company to include the pay slack.

This development is especially scary, given the past of BuzzFeed in relation to organized labor. CEO Jonah Peretti, always the astute entrepreneur, knew how to exercise maximum control over his employees. Although several media companies have syndicated their essays in the last two years (disclosure: Fast Company, too), the BuzzFeed The CEO has successfully nullified any attempt at his own company. At an all-company meeting in 2017, Peretti told his staff that although he likes unions, he just does not think they're right BuzzFeed. That pressure helped the company to end a unionization campaign for its team in the UK last summer.

Now laid-off employees have no choice but to accept what they BuzzFeed offered them. Remarkably, the compensation package did not include time off earned and without the influence of a union, BuzzFeed you have no reason to meet these people in the middle of the road. It's a particularly ruthless decision considering the company's years of trying to define itself as a haven for millennial creatives.

In response to calls from employees, BuzzFeedThe chief of staff, Lenke Taylor, sent the following memorandum to the organizers of the petition:

We would like to have a dialogue with the advice of the news staff and officials of other departments about the payment of the OPA. We are open to reevaluating this decision, but we think it is important for everyone to understand the trade-offs in changing the ODP practice, how we came to the decision to offer everyone a 10-week minimum wage and the ways we adjust. our compensation is fair and competitive in all states where we operate.

Soon, we will follow up on the next steps so that a representative group of company-wide employees can meet with Jonah and me about it. You will hear us by the end of the day Monday in the schedule and the next steps.

Clear, BuzzFeed and HuffPost are not the only companies announcing radical cuts, nor is Peretti the only media executive to strategically skirt organized union efforts. At the end of last year, the digital news startup Microphone dismissed almost all of his workforce and sold to Bustle founder Bryan Goldberg in a fire sale. In the last month, Microphone quietly relaunched with a brand new team that seems to be regurgitating old and unfinished works – despite the fact that MicrophoneThe former editors of the team were in the process of unionization. Other major media companies also had major cuts last year, including Gannett, Vox Media and Vice.

All of these events have occurred for more or less the same reasons: the obstacles of digital advertising in recent years have made executives and investors not have the return on investment they expected from these once-popular media startups. Because Google and Facebook continue to control the bulk of online advertising revenue, companies whose business models depend on ads suffer. Since 2016, there have been thousands of pivots, shifts, layoffs and reorganizations.

How did we get here?

Why they happen is twofold: The Google-Facebook duopoly took control of the ecosystem when no one was watching, and media executives – rich in venture capital infusions – swelled their business in the name of scale, often without considering sustainability.

Underlying the greed of Google and Facebook that has brought us to this point is the greed of media executives and their investors. BuzzFeed is the perfect example. For years, he was praised as the advertising boy of a media company in the digital age. It started as a content farm and a memes factory and then added journalism to its offerings. Over the years, he simultaneously broke stories and brought pageviews. At the time, legacy news organizations first mocked and then imitated BuzzFeedSocial approach first to the distribution of news. It was a growing media empire that could not be ignored in the new age of technology.

But as an outlet largely dependent on social platforms like Facebook, BuzzFeed was forced to follow the trends of the platform. When Facebook announced that it was focusing on video content, BuzzFeed turned their resources just for that. Brands like Tasty They were born, who fed the ubiquitous videos of food generally unappetizing to the masses. And for a while, that seemed to work. The videos performed well, thanks to Facebook's algorithmic push and BuzzFeed once again seemed a digital pioneer. But this bet was based on the whim of a social network known for pendular strategy changes at the expense of its customers; This pivot did not take into account what would happen if Facebook changed course. It should not be a shock that Facebook did just that.

Since Facebook did not emphasize videos to promote more "personal" content about a year ago, the bloodbaths followed. The layoffs continued when video views and page views decreased. It was a classic bait and change: Facebook had spent years luring publishers and advertisers to depend on it – generating huge amounts of traffic as more and more people arrived on the platform. Meanwhile, its share of advertising revenue has grown enormously, accounting for more than 20% of digital spending. And when Facebook decided to focus its algorithm elsewhere, the media companies that depended on that revenue stream were stuck.

Now publishers are struggling and are forced to figure out ways to diversify revenue and increase audience after years of bloated growth, thanks to platform machinations. Peretti was considered a fortune teller when it came to digital consumption. But he did not have the foresight to see why a path of profitability to the platform was a reckless bet. Nor did it take into consideration what kind of impact the industry as a whole their movements could cause.

Which brings us to the present. BuzzFeed, in his quest to become profitable, fired hundreds. Thousands more have been released in recent months. It is now becoming clear that the business path has been misguided from the outset. It has followed the spirit of technological scale and conquered – build, break, invest, repeat – into a revenue model that simply does not work that way. BuzzFeed he was trying to build and scale by following any algorithmic tricks he could; The hidden mechanism was that investors required faster growth and greater skills to get return on investment.

The real cost

There is no silver solution to correct the media business model, and companies realize that margins are difficult and that it is an ecosystem whose potential for growth and profitability are diametrically different from technology. We are in the midst of a gigantic consolidation because of a false myth that fueled entrepreneurial greed.

The next few years will be interesting and probably devastating. Media companies are realizing how unsustainable their business strategies have been until now. And many do not seem to have a solid understanding on how to move forward.

Companies are likely to merge, others to close. The collateral damage is always the same: employees get stuck in the middle, without job security, and the hazy hope that their industry can recover and regress.

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