The Top Tech Companies by Revenue per Employee | Hacker News Reader

The Top Tech Companies by Revenue per Employee

visualcapitalist.com

36 pointsnradov43 comments

That Apple is on the list and Amazon is not is a bit irking to me. Since they're clearly counting Amazon's fulfillment employees, but I doubt they're counting for example apple store employees, or the half of Foxconn which is basically Apple.

That is to say, this data can be massaged.

They do include Apple retail employees.

Updated: 116k employees, 215.6 billion USD in revenue.

Ah, my mistake. Even still I think the bigger issue is that Amazon includes fulfillment employees, whereas Apple (a hardware company, by most accounts) does not employ anyone in hardware production, instead contracting that work out.

Of course that leads to a bit of a slippery slope ("why not only count the AWS team"), but I still think its an important note.

According to this article, Amazon has $101,749 in revenue per employee (which is almost 2x that of Wal-Mart). That's roughly 1/18th what Apple's doing.

https://www.fool.com/investing/2017/06/26/amazon-generates-t...

That's not a comparable metric. That is only going by a single quarter instead of the whole year, which is important when you factor in the holidays at the end of the year. Last year Amazon's revenue was around 136 billion and it had around 341k employees, so the revenue per employee was around $400k

Oops, you're right: didn't realize the article was using quarterly numbers!

would revenu per engineer be better?

I'm not sure why infographics like this usually focus on revenue instead of profit. Revenue is not a meaningful measure of which companies are "stronger." It's like comparing weighlifters without taking their size into account. (I'm much more impressed with someone smaller who can lift 300 lbs than someone huge who can lift 350 lbs.)

Other things being equal, would you rather have a 10,000-employee company that sells $10b worth of widgets at a 1% profit margin, or $2b of widgets at a 40% profit margin?

I respectfully disagree. From a short term investment perspective, then yes, perhaps I would be interested in profit/employee ratio. However, from an holistic economical health and long term investment perspective, I want to see the top revenue/employee generators.

Why is that? Because revenue is a pure measure of productivity, whereas profit is a measure of income after a number of filters (deductions are applied - some of which are subjective) have been applied. Using revenue, I can see how much horsepower a company is contributing to society.

It all boils down to what your looking at the data for.

If I'm looking to hire one person to lift kegs of beer into my truck everyday (this is me dreaming) I'm more interested in the big lady doing more absolute work (e.g. lifting 350 vice 300 lb).

I get what you're saying, although my view is a little different. Where we agree is that it's key to measure the horsepower a company is contributing to society. However, my perspective is that profit is a better approximation of that than revenue.[0] Revenue is often more reflective of input costs than value generated. For example, if you buy $900k of steel, spend $25k doing something to it, and then sell the resulting product for $1m, then how much value did you create? I'd argue that it's the profit ($75k) and not the revenue ($1m).

[0] That said, profit isn't a perfect metric either. By that measure, Amazon contributes almost nothing to society. Some combination of R&D reinvestment and contribution margins is probably a better metric.

The Top 20 Public Tech Companies by Revenue per Employee.

There are some private ones with far higher revenue per head than any of these.

Specifically, the top 20 of the 69 members of the S&P 500 information technology sector index.

I would have thought Berkshire Hathaway would be higher, but apparently it's only ~$600K/employee.

https://csimarket.com/stocks/BRK-Revenue-per-Employee.html

Craigslist?

This is old:

https://www.linkedin.com/pulse/craigslist-beats-google-faceb...

I believe Netflix is missing (should be #1 here with $2.5M per employee).

Apple is notable for its large retail staff. Its profit per engineer may even exceed that of Netflix, despite being a much larger company.

Are you including the actors and production crews for Netflix's exclusive content?

Smaller companies can quickly fare better than bigger ones, see Nintendo: http://quotes.wsj.com/NTDOY/financials

All this infographic tells me is that these companies probably outsource their support jobs to other companies.

That is, instead of hiring their own full-time janitor to clean up at headquarters, they hire CleanCo sanitation service company, who hires the full-time janitor to clean up at headquarters. Instead of hiring a cook to work the company cafeteria, they hire CaterCo corporate catering company, who hires the cook to serve the cafeteria line.

No idea what's going on with Apple. It seems implausible they could bring in that much per employee if you include all the staff at their retail stores.

Does that data include contractors? As we know well, companies often use contractors as large parts of their labor forces and to fill important roles.

In the article's data, the differences between the companies could depend to a great degree on the variation in employment relationships (i.e., contractor or employee) and not in the productivity of labor.

Remarkable how capital intensive hardware is: AMD is on the list but often operates at a loss!

Also wondering why Nvidia didn't make it to this list.

This would be a much more interesting list to look at if it included all public tech companies, not just Fortune 500 companies.

Now I can brag and add my (small) business in the top 5!! ;) I am guessing there would be quite a few others in that position.

Credit Card companies are Tech Companies now?

Credit Card companies are the ones who manage the transaction between the point of sale and banks that issue credit cards. There is a sophisticated network of technologies to process transactions and manage and mitigate fraud. They may not sell tech, but many of the companies in the list don't, either: tech is a means to their end.

> tech is a means to their end.

Wouldnt this be all companies on the planet then

No, not remotely. Some companies use tech as a tool of convenience but have no need of being involved in its development. For example anyone who operates a small-time retail business who sells via Amazon or their own e-commerce site. Companies like the ones I refer to depend on having and developing sophisticated technology as a part of their core competencies and business model.

For example, there isn't a (sane) bank on the planet that would use, say, Visa as their payment processor without the various indemnities against fraud in the contracts they sign. And those indemnities are only possible if Visa has a sophisticated payment processing network with fraud detection.

It's a good point and it really is a fuzzy distinction, but consider Wal-Mart. They employ a lot of tech, but the goal is to put a product in the hands of a customer in exchange for money[0]. Visa is closer to the boundary: it's doing transactions, and a bigger portion of that business is just shuffling bits around than what Wal-Mart does.

But then again: is Amazon a tech company? AWS is, but the retail portion is less clear.

[0] Isn't that Apple too? Yes, but the sole product is a technology product (even if it has fashion aspects like the watch).

They don't just provide credit. They also trade in personal information.

Visa and MasterCard don't provide credit at all. They are just payment processors.

Credit card companies not so much (basically a loan product with tie-ins to third-party payment processors and decision engines), but payment processors? Absolutely.

Imagine interviewing at Apple. "Can you bring us an extra $2 million/year in revenue? No? Then go away."

At $700 per iPhone, that's only 3000 more iPhone to sell in a year.

Could you improve the sales of the iPhone by 3000 somehow? probably.

For a software person that would likely not be terribly difficult. People don't realize how easy it is for software to bring in avalanches of money due to the very early illegal wage-fixing tech companies engaged in (and were convicted of by the courts.. far, far too late to undo the damage). I am convinced the productivity gains that software makes possible is really responsible for wages freezing in the 80s. It's an easy sell to give people a 5% annual raise when their productivity grew by 8%. What do you do when they start using software that grows that productivity by 50%? 150%? 500%? It suddenly looks absurd to compensate people according to the value they are creating for the company. A secretary in the 80s could answer maybe 25 letters a day if they were pretty good, using snail mail and typewriters and whatnot. A secretary today can answer 300 emails before lunch with ease. They are creating profoundly more value, reducing headcount by huge amounts, making possible fundamentally different levels of interaction between customer and supplier... and they're making the same amount for it.

And at these companies, the employees are paid many times higher than market average rates, right? Free market dictates this? The appropriate value of any product or service is quickly determined by the market and compensated accordingly?

Do lists like these make anyone feel bad when comparing their pay?

I don't know how to measure my contributions in terms of dollars but these lists make me feel a bit down.

Measuring your contributions in terms of dollars IS tough. Someone at the company likely had a number for you somewhere, or at least your 'position' (since they like to think of you as being a superfluous factor, able to be switched out for any similar cog), but you won't ever see it. This is why sales people are usually the best paid people at any company next to the executives (and sometimes above them for non-public companies). When the company says 'we don't know if we can give you a raise this year' or similar, the sales person can say 'I brought you $15 million in business last year - you can afford to give me a raise that matches cost of living increases.' Hardly anyone else in a company can ever do that.

How come there are no tech companies from SF there?

Who do you have in mind? Of the big companies capable of brining in the same levels as the big valley companies, I'm not coming up with good candidates. Twitter is notoriously overstaffed, so that big denominator is probably hurting them here. Uber is still in subsidy city, so that numerator can't be too good.

Salesforce?

Most of them make very little, or negative money.

This is revenue, not income. If you spend $2 to make $1 in revenue that's still revenue.

What I said still applies.

You were speaking specifically of profit.

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