Netflix seems to have an unusually open culture in general, including topics such as salary - they put their money where their mouth is and basically egg everyone on to beat them. Gotta respect that a company is willing to do that (I don’t work for them, but I do work for one of the big public tech companies listed in those charts)
EDIT: Sorry, I misunderstood something. Netflix has indeed been making a profit.
A company with a positive cashflow and GAAP profitable is in the best spot, followed by a company with a positive cashflow and losing money in GAAP-land, followed by a negative cashflow and positive GAAP-land, followed by a negative cashflow and negative GAAP.
Content should be amortized as it will generate revenue for years. It's essentially being treated as a capital expense, which isn't unreasonable.
Intuitionistically, it makes total sense that you get a clearer picture of the true state of the finances of Netflix as a going concern if they recognize the costs of a show on their balance sheet over five years when they expect subscribers to still be watching it for the first (or second, or third) time several years on.
(Most people have trouble wrapping their heads around just how huge consumer markets are. If you have 300M users - a la Whatsapp when Facebook acquired them - and charge them just $1/year, that's $300M/year in revenue, or enough to afford 1000 $300K/year engineers [or actually more like 1000 $200K/year engineers once you figure in overhead]. Similarly, if just one person out of every 100 acquaintances you know uses a product but they spend $10/month on it, that's about $400M/year. The challenge for consumer businesses is usually that they have to spend more to reach those customers and get them to open up their wallets than they make from each one, not that there aren't enough customers.)
Of course out of those $12bn, 7-8 will go to cost-of-goods-sold (buying or making the content they serve up). Still, 3-4bn of gross income pays for quite a few engineers.
$2.98 billion sales, $991m gross profit, $208m operating income
Tracking toward $11.75b - $12b in sales for fiscal 2017, with a mere ~3,400 employees or so.
They've historically had relatively slim margins (especially in the streaming business), probably explains the very thin employee base versus the sales.
I think you're massively underestimating overhead. Each person who works on a product should make a max of 15-25% of what they bring in. If you have a repair shop and you charge $100/h, you should be paying your techs $15-25.
$1 billion a month is about $1.4 million an hour 24/7.
$300,000 + ~$50,000 in benefits / 260 working days yearly / 8 hour work days is about $170 an hour.
That works out to earning about 0.012% of what they bring in.
Netflix is a bad example because, like most media companies, the vast majority of their expenses go towards media licensing and production. So while it's easy to paint their engineers as overpaid compared to the labor market, it's very difficult to paint their engineers as overpaid relative to their product.
Netflix has other perks of course. But they also have a pretty crazy layoff policy and they brag about how awesome their severance package is.
Employment as Netflix is really a mixture of the income premium and lack of stability that a contractor would have, with a compensation structure closer to a startup (base salary only, no formalized bonuses).
Note, ever since IC Engineers started getting significant bonus/stock grants (Which, I think, is something that has been a thing for less than a decade, at least for grants of publicly traded stock.) From what I've seen? Contractors have lost their income premium.
I mean, contractors still make more than what they'd make full time for base salary, but base salary is now a relatively small portion of total comp for FTEs at most places.
Just my observation; I'm also talking about the sort of contractors who go through body shops and essentially do the same jobs as the regular employees.
When you look at that world, contractors still win by a very wide margin: They are organizations where HR will not allow a hire for a competitive salary, but a department head can spend their budget on contractors any way they want. This leads to gigantic pro-contractor differences: As recently as last year, I made three times as much as someone sitting next to me that had Architect in their title, and the contract was for many hundreds of hours, so it's not as if there was non-billable overhead.
Now, the big tech companies can compete with contractor billing rates, just as long as it's either Netflix, or someone with good-as-money stock grants, but if you live in, say, Kansas City, you won't smell those companies anyway, and chances are that, barring remote work for a giant, the best you can hope for without contracting is salary that isa little bit below Google's, but no stock.
Those jobs with the as good as money stock grants are interesting because they represent the top of the market not just locally, but globally. If you want to maximize income in this industry and you are not good enough to move markets to you, you move to silicon valley and interview.
Netflix has high salaries but doesn't (for normal employees anyway) give equity. The other big tech companies do. And equity can be a significant part of your total compensation especially given tech stock performance. I think there's no bonus either but I'm not certain of that part.
Note that some will consider paying straight salary an advantage. It's certainly more straightforward.
Given that stock was like half my compensation, I wasn't going to give it up to avoid the hassle. But next time, no thanks.
edit: just noticed your username, hah.
Also $300K a year is definitely in the "nice problem to have" category.
According to Paysa's self-reported survey data (which, for all I know, is hogwash):
Netflix, senior software engineer, $323k ($323k cash)
Google, senior software engineer, $340k ($220k cash)
Facebook, software engineer, $317k ($190k cash)
Google, software engineer, $281k ($180k cash)
Or am I reading too much into the quotations? I'm honestly just interested in hearing more about what the culture at Netflix is like.
https://jobs.netflix.com/culture
It's not just marketing fluff. It really does a good job of reflecting what it's like to work there, and is taken seriously by everyone from the top down.
As I mentioned elsewhere in this thread, it's not a competitive environment, and I've experience very little politics and drama. Those things are explicitly counter to the culture.
As for long hours, while the work day can be pretty intense, the office is usually empty by 5-6pm.
Hope that helps.
(because the bus to San Francisco leaves at 4:30pm)
At what point do you tell your employees that they live in the wrong city? Sacramento?
Do you have any kind of remote working allowance? Or are you expected to be in office all the time?
"Today, Netflix offers unlimited vacation time, high salaries. This company doesn't care how long you're in the office, but they do care about what you produce. And you have to produce. Here's another slide. We are a team, not a family. We are a pro sports team, not a kids recreational team.
Netflix fires people, even hard-working people.
HENN: How many people have you moved on?
MCCORD: Oh, hundreds.
HENN: I talked to a lot of former employees were OK with this deal. I mean, after all, Netflix pays well. But some talked about a culture of fear - always been worried about being fired. Patty says the company's culture is a big reason for its success. She says it keeps Netflix lean and nimble."
Top Tier in the sense that they have very good technical skills, paired with the right attitude for Netflix’s culture. I haven’t them be unreasonable for the standards they set but they want the very best and want you to work hard everyday. The difference is they don’t seem to stockpile talent, they cut when someone doesn’t meet that bar and have paid them incredibly well till that point.
I would suspect and hope that, given such high salaries, their retain-or-fire decision is more sophisticated than that.
I think that software engineering productivity is a fairly difficult thing to measure quantitatively. Any simple objective quantitative measure (like hours spent working, lines of code contributed, or tickets resolved) is bound to be too naive.
Software engineering seems like one of those things where it’s easy to subjectively identify very good and very poor performers, but difficult to draw a hard line or even compare two similarly productive programmers.
Netflix is known for a few things: They pay really well. They don't tolerate drops in performance. The two go hand in hand (they're open about it). And as someone else mentioned, they encourage their employees to interview elsewhere, and they make it their goal to try to match any higher offer the employee gets.
I think their culture is the type that self-selects. People who don't want the stress of being a top performer all the time tend not to apply, or leave very quickly.
For example, from our culture page: "We have no bell curves or rankings or quotas such as “cut the bottom 10% every year.” That would be detrimental to fostering collaboration, and is a simplistic, rules-based approach we would never support."
https://jobs.netflix.com/culture
Our culture can feel intimidating, especially if you have any degree of imposter syndrome, but with very few exceptions, my colleagues and managers have always been supportive and really great to work with.
Could you elaborate?
I'm glad to hear that may not be true as it's always put me off from attempting to work there.
Contrasted to a friend who heard something passing on information that they were not expecting to be held accountable for.
I might trust my friends more, if my friend and someone on the internet had the same information, but might trust someone on the internet more if they had better knowledge.
Also, they did say "might not be true", and it certainly makes sense to use new knowledge to adjust the probabilities of belief.
No and yes? The problem is I didn't have any friends who worked directly for Netflix this is mostly what they had heard from others and what one supposedly asked about during his interview a few years back.
So yeah I trust them but they also got their information second hand which, when compared to "stranger on the internet claiming to be working at Netflix" I don't see a huge difference in.
This is possible in companies growing rapidly or bringing in lots of money.
In 1990s, It was very common in Indian IT services firms to openly talk about salaries and promotions, as getting the best of both was easy for every one. Enter 2000s and all of this came to an abrupt end, stack ranking emerged out of nothing as people competing for limited resources compared themselves with each other.
Its not that hard to pay and promote when things are going well. Its only when the scarcity kicks when the real issues start.
Is the management aware that because of this you're missing some great talent out there? Maybe they should consider changing a stance a bit...
I feel like a lot of big tech companies these days pay engineers to sound smart rather than for doing actual work. The interview processes at these companies would certainly indicate that.
https://news.ycombinator.com/item?id=15367421
I think that's some studly work, so much so that I'm sitting at the FreeBSD conference at Netflix right now.
I'm retired but some people got me interested in this stuff and I asked netflix for some hardware to look at numa performance issues. I showed up and they just handed me a 2U server, 2 Haswell sockets, 14 cpus (unthreaded) per socket, 256GB, 26TB of SSD. Neat machine :)
So far, from what I've seen, Netflix seems like they are close to what they describe on their culture page (that's been linked on this page) but it's early on for me.
I can say that playing with the hardware, learning about the issues, talking to people about kernel work has got me pretty pumped. Fun problems, fun people.