Efficient but expensive | Latest financials show Facebook owner paid out $86k per redundancy

The benefits of talent retention and the costs of redundancies have been laid bare in Meta’s most recent financials.

The Facebook owner's Dublin-based international headquarters reported redundancy costs of €40.4million ($42.5million) in 2023 in payouts to 491 employees - an average of €82,000 ($86,000) per employee.

The costs formed part of broader restructuring efforts as the tech giant pursued efficiency measures and adjusted its strategic priorities.

The workforce reductions, representing an 18% decline in headcount, reduced the number of employees from 2,662 to 2,171. It followed previous redundancies in 2022, when 350 roles were eliminated, and coincided with announcements of further job losses in May 2023.

Meta staff costs

The redundancy expenses contributed to Meta Platforms Ireland’s overall staff costs, which rose slightly to €524.8million, up from €518.5 million the previous year. The costs also included €105.7million in share-based payments.

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Despite the restructuring, Meta’s Irish arm achieved record revenues of €69.75billion in 2023, a 20% increase from the previous year. This accounted for 54.5% of the parent company’s global revenue of $134.9billion (€128billion). Pre-tax profits also climbed, rising by 6% to €1.85billion, while post-tax profits stood at €1.56billion after a corporation tax charge of €288.5 million.

In addition to operating gains, the firm distributed a €900million dividend to its parent company, Facebook International Operations Ltd, a figure sharply lower than the €3.7billion dividend paid in 2022. Post-balance sheet disclosures reveal that another €600million dividend was approved in March 2024.

While Meta Platforms Ireland continued to thrive financially, the company faced regulatory challenges. It set aside €143.7million in provisions for potential fines, adding to a €4.17billion reserve for legal and compliance risks at year-end. The European Commission also launched investigations into the company’s compliance with the EU Digital Services Act and consumer protection laws, though the financial impact of these proceedings remains uncertain.

Growth and efficiency

The group’s administrative expenses, amounting to €65 billion, included non-cash depreciation costs of €65.4 million, while research and development spending fell from €196million to €155.4million.

As Meta’s Irish unit continues to play a pivotal role in the company’s global operations, the financial gains are tempered by both restructuring costs and ongoing regulatory scrutiny. The interplay between strong revenues and the costs of redundancies demonstrates the challenge of balancing growth with operational efficiency.