Facebook UK cuts jobs while profits soar, sparking outrage

In the UK, Facebook underwent significant staffing changes, laying off over 700 employees as part of a global restructuring effort by its parent company, Meta. This decision was driven by a need to address a substantial decline in revenue experienced during the recent advertising slowdown. Relevant financial details reveal that the restructuring led to a cost of £79 million for the company, simultaneously reducing the workforce from 7,053 to 6,338 by the end of 2023. Notably, the largest impact was felt in sales support, administration, and marketing teams, while the crucial engineering team managed to escape the worst of the job cuts. Despite the staffing reductions, Facebook UK's financial performance showed mixed results. For the year, revenues dropped slightly from £2.9 billion to £2.8 billion, contrasting with the previous year's nearly £1 billion increase. However, pre-tax profits increased from £328 million to £355 million, which indicates that the company has been able to sustain a level of profitability despite a challenging advertising environment. Additionally, the tax bill paid by Facebook UK decreased significantly from £126 million in 2022 to £43 million last year, reflecting a reduced effective tax rate that was about 12%, far lower than the standard 25% corporation tax rate in the UK. The decision to cut jobs is part of a broader strategy initiated by Mark Zuckerberg, who acknowledged misjudgments made during the COVID-19 pandemic related to overinvestment. In a memo to staff, he reflected on the need for the company to adapt to changing market conditions following a unique period of heightened online activity that was not expected to sustain. Moreover, the organization has since focused on consolidating facilities, highlighted by a costly exit from a central London office for £149 million. Looking ahead, Meta has shown signs of recovery, reporting a remarkable financial turnaround in its latest quarter. With a 19% year-on-year sales increase to $40.6 billion, the company's market value has nearly doubled, now standing at $1.5 trillion as share prices have surged by nearly 92%. The company is also ramping up investments in artificial intelligence and anticipates significant capital expenditures moving forward, potentially reaching $50 billion next year. However, the number of daily active users across its platforms has not increased at the pace analysts hoped, with a 5% year-on-year rise recorded just recently.