Facebook’s UK office laid off over 700 workers, reduced tax bill to aggressively cut costs last year

Meta has channelled its energy into artificial intelligence, predicting capital expenditure could reach $50 billion next year. The Meta AI assistant, already boasts over 500 million active users. However, user growth across Meta’s platforms has been slower than analysts hoped

Meta’s cost-cutting wasn’t limited to layoffs. Facebook UK halved its tax bill, paying just 12% of its pre-tax profits, compared to the standard 25% corporation tax rate. Image Credit: Reuters

Last year, Facebook’s UK operations saw major changes as its parent company, Meta, slashed over 700 jobs and introduced aggressive cost-cutting measures. The redundancies, part of Meta’s first-ever global layoff wave, cost the company £79 million and aimed to counter a significant drop in revenue. This move followed a pandemic-era overinvestment, with Meta’s CEO, Mark Zuckerberg, admitting that the company had overestimated the permanence of heightened online activity.

In the UK, these layoffs reduced Facebook’s workforce by 10%, bringing the employee count from 7,053 to 6,338 by the end of 2023. Most cuts targeted sales support, administration, and marketing roles, while engineering teams faced minimal impact, underscoring the company’s focus on maintaining platform development.  

Tax cuts and office closures

Meta’s cost-cutting wasn’t limited to layoffs. Facebook UK halved its tax bill, paying just 12% of its pre-tax profits, compared to the standard 25% corporation tax rate. Additionally, the company spent £149 million to terminate its lease on a central London office, part of a broader “facilities consolidation strategy.”  

Despite the revenue dip from £2.9 billion to £2.8 billion in 2023, pre-tax profits rose to £355 million from £328 million the previous year. The tax payment reduction, however, attracted criticism, as it was significantly lower than the £126 million paid in 2022.

Financial recovery gathers pace

Meta bounced back strongly in 2024, with its latest financial reports to September showing a 19% year-on-year sales increase, hitting $40.6 billion.  

The company’s market value has soared to $1.5 trillion, with shares climbing nearly 92%. Zuckerberg described this as one of the most dynamic periods in the tech industry, hinting at ambitious growth plans.

AI investment and user growth challenges

Meta has channelled its energy into artificial intelligence, predicting capital expenditure could reach $50 billion next year. The Meta AI assistant, already boasting over 500 million active users, is a cornerstone of these efforts. However, user growth across Meta’s platforms has been slower than analysts hoped. Daily active users rose by 5% to 3.29 billion, just shy of expectations.

As Meta eyes future opportunities, balancing innovation and sustaining user engagement remains a critical challenge in its post-pandemic journey.