Facebook cut more than 700 employees in the UK last year at a cost of £79m, after parent company Meta embarked on its first ever round of redundancies as part of a global cost-cutting drive to offset a disastrous collapse in revenues.
The company – which is one of the most valuable US tech companies behind Apple, the Google owner Alphabet, and Amazon – also reduced its UK tax bill to just over 12% of its pre-tax profits, half the standard 25% corporation tax rate.
Mark Zuckerberg cut 11,000 jobs globally after admitting that Meta had overinvested at the start of the coronavirus pandemic in the belief the increase in online activity would continue and accelerate even after Covid eased.
“I got this wrong, and I take responsibility for that,” said Zuckerberg, the founder and chief executive of the owner of Facebook, WhatsApp and Instagram, in a memo to staff at the time.
Accounts for Facebook UK reveal that the edict resulted in 10% of its workforce being axed last year, reducing employee headcount from 7,053 to 6,338 by the end of 2023.
The brunt of the UK cuts were borne by the sales support, administration and marketing teams, which 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 £149m to break its lease on a central London office building 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 almost £1bn leap in annual revenues it recorded between 2021 and 2022, before the global advertising slowdown.
However, the company still managed to increase pre-tax profits from £328m to £355m. Facebook UK, which has been criticised over the amount of tax it pays, paid £43m last year. This is down on the £126m the British arm paid in 2022.
Meta has recovered financially from the advertising wobble in some style this year. The company beat high Wall Street expectations in its latest financial report to the end of September, reporting a 19% increase in year-on-year sales to $40.6bn.
Meta’s market value has almost doubled in the last year to $1.5tn with the share price up by almost 92%.
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“I’m pretty amped about the work we’re doing right now,” Zuckerberg said during the earnings call. “This may be the most dynamic moment that I’ve seen in our industry … if we do this well the potential for Meta and everyone building with us is massive.”
Meta has been ramping up investment in artificial intelligence, and predicted that capital expenditure could hit $50bn next year. Zuckerberg has said that Meta AI was on track to be the most-used AI assistant in the world with more than 500 million monthly active users.
However, Meta has not managed to increase the number of daily users of its social media platforms at as fast a rate as analysts would like. In the quarter to the end of September it notched up 3.29 billion “daily active people”, a 5% increase, but less than the analyst consensus of 3.31 billion.