Controversial website Ask.fm has axed staff as its Dublin-based arm racks up big losses

CONTROVERSIAL WEBSITE ASK.FM, which allows users to post anonymous questions to others, has shed a quarter of its global workforce as its European operations post large losses.

The website came under criticism both in Ireland and abroad after it was linked to the deaths of several teenagers, including two Irish schoolgirls.

Ask.com, which is owned by US media group IAC, acquired Ask.fm in 2014. IAC also owns applications such as Tinder and Vimeo, and has said that it would spend “millions” to improve safety on the site.

In 2014, Ask.fm relocated its European headquarters to Dublin from Latvia. After a number of officials voiced their concerns about the move, the website’s CEO, Doug Leeds, reassured people that the company had introduced several measures to make the page safer, such as moderating comments left on the site.

New accounts filed for Ask.fm’s main European subsidiary, which is incorporated in Ireland, show the company lost just over €7 million during the 14 months to the end of 2015.

Revenue was €10.7 million, the majority of which originated in the US, while the remainder was split between Europe and the rest of the world. However the company also spent over €19 million during the period.

Ask.fm CEO Doug Leeds

Losses

Out of the company’s budget, more than €7 million was assigned to its cost of sales – including the spend on data housing and moderation – which incorporated licensing fees for software that is owned by other companies within the group.

Another €12.5 million went out on administrative expenses. The company said that this mainly comprised of “personnel costs, capital depreciation and legal expenditure”.

The company made an operating loss of almost €9 million, although this was brought down to just over €7 million due to other subsidiaries in the group paying Ask.fm a €2 million dividend.

The accounts also show that the company received large loans from other group subsidiaries, to which it owes about €16 million.

In statements accompanying the records, the company’s directors said that the results are “in line with management expectations”.

They acknowledged that the firm is reliant on financial support from its fellow subsidiaries but added that they have confirmation that help will continue to be provided for the next 12 months.

Staff cuts

However, the directors added that in April 2016 “the company entered into a workforce reduction programme in an effort to reduce its cost base and streamline its work activities with a view of returning the company to profitability”.

A spokeswoman for the website told Fora that the measures “to consolidate core functions within specific offices, thereby reducing headcount, already took place in April”.

“This was not specific to European offices and impacted 25% of Ask.fm’s global workforce,” she said. The spokeswoman would not say the total number of staff that had been impacted or how many people are still employed in Ireland.

However, she said that the company currently employs 80 people, meaning that the website is likely to have cut about 25 staff.

She added that the site has “consolidated leadership, revenue and safety out of the US, product development and moderation in our Riga office, and legal and data oversight in our Irish headquarters”.
Ask.fm Europe employed seven people during the year and had staff costs of just under €500,000, according to the accounts.