Facebook laid off more than 700 employees in the UK last year at a cost of £79 million, after parent company Meta embarked on its first round of redundancies as part of a global cost-cutting drive to offset a disastrous collapse of income.
The company, which is one of the most valuable US technology companies behind Apple, Google owner Alphabet, and Amazon, also reduced its UK tax bill to just over 12% of its pre-tax profits, the half the standard 25% corporate tax rate. .
Mark Zuckerberg cut 11,000 jobs worldwide after admitting that Meta had invested too much at the start of the coronavirus pandemic in the belief that the rise in online activity would continue and accelerate even after Covid subsided.
“I was wrong and I take responsibility for it,” Zuckerberg, founder and CEO of Facebook owner WhatsApp and Instagram, said in a memo to staff at the time.
Facebook UK accounts reveal that the edict resulted in 10% of its workforce being made redundant last year, reducing employee headcount from 7,053 to 6,338 by the end of 2023.
The brunt of the UK cuts fell on sales, administration and marketing support teams, which were reduced from 2,307 to 1,734 people. The engineering team, crucial to the development of the platform, missed the worst of the cuts.
Last year, Facebook also paid £149 million to cancel the lease on an office building in central London as part of what it called a “facilities consolidation strategy” in its latest public accounts.
The headwinds facing Facebook meant its UK revenue fell slightly from £2.9bn to £2.8bn between 2022 and the end of 2023. The figures show a major slowdown from the jump of almost billion pounds in annual revenue it recorded between 2021 and 2022, before the Global Advertising Slowdown.
However, the company managed to increase pre-tax profits from £328m to £355m. Facebook UK, which has been criticized for the amount of tax it pays, paid £43 million last year. This is down from the £126m the UK branch paid in 2022.
Meta has recovered financially from the advertising crisis somewhat this year. The company beat Wall Street’s high expectations in its latest financial report in late September, reporting a 19% increase in year-over-year sales to $40.6 billion.
Meta’s market value has almost doubled in the last year to $1.5 trillion and the share price is up almost 92%.
after newsletter promotion
“I’m pretty excited about the work we’re doing right now,” Zuckerberg said during the earnings conference call. “This may be the most dynamic time I’ve seen in our industry… if we get this right, the potential for Meta and everyone building with us is enormous.”
Meta has been increasing investment in artificial intelligence and predicted that capital spending could reach $50 billion next year. Zuckerberg has said that Meta AI was on track to become the most used AI assistant in the world with more than 500 million monthly active users.
However, Meta has failed to increase the number of daily users of its social media platforms at the rate analysts would like. In the quarter to the end of September it recorded 3.29 billion “daily active people”, an increase of 5%, but less than the analyst consensus of 3.31 billion.