Meta, the social media giant, is set to cut over 10% of its UK workforce and close Instagram's recently established hub in London as part of its latest restructuring effort, resulting in its retreat from the British capital.

According to the Financial Times, an internal memo sent to employees on Wednesday revealed that at least 687 positions, primarily in London, will be cut by the company, and additional roles among its UK workforce of around 5,000 are at risk of being made redundant.

The Instagram team in London is expected to be hit the hardest, with 250 positions set to be eliminated, although some employees may have the opportunity to relocate to New York. However, the photo app will still be headquartered at Meta's main offices in Menlo Park, California.

Less than a year after Meta established a significant hub for Instagram in London, with its head, Adam Mosseri, moving to the UK capital to expand staffing and compete with the fast-growing rival TikTok, the shake-up has been announced.

Following Meta's announcement of plans to eliminate over 20,000 jobs as part of cost-cutting measures described as a "year of efficiency" by CEO Mark Zuckerberg, the latest move to axe more than 10% of its UK workforce and close Instagram's new hub in London is in line with the company's ongoing restructuring efforts. As of the end of 2022, Meta employed approximately 86,000 people worldwide.

After weathering the initial wave of layoffs, Meta is now focusing on one of its largest international offices in the UK for further job cuts. “London got away lightly in the first round of cuts, perhaps because of employment laws here. Now they have made the deep cut in the US, they have to apply it more evenly,” said one former UK-based Meta manager.

Less than a year after its establishment, Instagram's hub in London is set to be dissolved, according to an announcement made by Adam Mosseri, the head of Instagram, to the staff on Wednesday.

During the meeting, Mosseri revealed that he had obtained the necessary budget to transfer London-based employees to Instagram's offices in New York. He also anticipated that there would be more job openings than employees willing to relocate, as reported by attendees of the meeting.

“Adam was often in the office and was concerned about Meta being too US-centric. He was trying to change that and has been forced to give up by higher powers,” said one Instagram employee.

According to another source, Mosseri expressed frustration about the decision to leave London and was hesitant to relocate his family back to the US. However, Meta informed the Financial Times that Mosseri's move to London had always been intended as temporary.

The restructuring comes amid a challenging economic environment marked by rising inflation, macroeconomic challenges, and the impact of Apple's privacy rules. In response to investor calls to address its financials, the $551 billion social media company is undertaking the shake-up.

Investors have expressed concerns over Zuckerberg's ambitious but costly plan to create a metaverse filled with avatars, which may not yield profits for many years. Following a stock sell-off in 2022, Meta's shares have rebounded by over 70% year-to-date, currently trading at $215, but still below their peak during the pandemic boom times in 2021.

Meta's restructuring efforts in the UK will impact approximately 55 jobs across apps such as WhatsApp and Facebook, as well as nearly 60 jobs within its Reality Labs, responsible for developing the metaverse, and its artificial intelligence teams, as stated in the internal memo.

The job cuts in London have also impacted other areas such as monetisation, advertising, data scientists, designers, and user experience researchers. According to three insiders, the job cuts strategy in London has been described as a "scattergun approach," with teams being selected at random for redundancy. 

A former engineering manager stated that there is no logical explanation for why certain teams are affected, as underperformers have kept their jobs while high performers have lost jobs simply because they happened to be in the wrong team.

While employees have been informed that they have the option to relocate or apply for other roles within Meta, some managers have advised at-risk employees to start seeking jobs outside the company. A consultation process has been initiated to determine which staff will be retained within the group. "We do not feel secure," expressed one Instagram employee who is considering a move but is worried about having a work visa tied to Meta during a period of instability.

London office of Instagram, which was established in 2013, was its first international building. Since then, the city has grown into a significant location for Meta, serving as its largest engineering base outside the US. 

Mosseri, who joined Facebook in 2008 and led the team responsible for developing its news feed, was appointed as the head of Instagram in 2018 after the original co-founders of the app left the company.

Mosseri's ambitions of building a large team with multiple layers of seniority were dashed when Zuckerberg announced in February his plan to cut down "middle managers" in order to streamline decision-making processes. As a result, teams have become disorganised, working across different countries with an unclear chain of command, and morale among employees has hit rock bottom, with productivity suffering, according to several current employees. 

"One Instagram employee mentioned that Mark emphasises the importance of in-person interactions and wants people to be back in the office, under his direct control," said one Instagram employee, reported FT. 

Despite Meta's efforts to reduce costs by shrinking its real estate footprint, including downsizing its leased offices in the US, it opened new offices in King's Cross, central London in March last year. However, the company is now reportedly looking to sublet a 310,000 square-feet office in Fitzrovia, London, England, which it had leased in 2021 but never occupied.