Media mogul Byron Allen marked his new ownership of BuzzFeed on Tuesday with a decisive strategic maneuver, cutting roughly 180 employees to ensure the digital publisher immediately begins costing him less money.
The Allen Media Group founder explained to investors that the most direct path to extracting value from a struggling digital property is to rapidly decrease the number of human beings producing its media. Outlining his vision for the brand’s future, Allen noted that the 33 percent reduction in headcount would finally allow the company to focus on its core competency of minimizing his personal financial exposure.
The financial modeling on this transaction is incredibly straightforward: if we simply stop paying the people who actually make the product, we get to keep all that cash instead.
Wall Street analysts praised the aggressive restructuring, noting that purchasing a media company only to immediately dismantle its newsroom represents a textbook market synergy. Shares across the broader digital publishing sector ticked upward in morning trading as investors grew optimistic that other corporate owners might also realize they do not strictly have to employ journalists to own a journalism brand.
In a company-wide memo circulated Tuesday afternoon, Allen expressed his deep excitement about the publication's next chapter, urging the surviving staff to seamlessly absorb the daily output of their departed colleagues while he evaluates whether the company needs saving again next quarter.