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Comment by tauntz | Hacker News Reader

I'll add a concrete example from a not-too-cheap-anymore EU country: Estonia.

* Average software dev salary in Q12026: 4945€ / month [1]

* Total cost for the employer: 6616.41€ [2]

For $20k/month, you'd get 2 x full time mid-level developers + 1x junior dev or QA.

So the calculation becomes: which option can produce better results for your specific use-case, "you + Fable" or "you + 2x mid-level developers + 1x QA". (and from personal experience, mid-level in Estonia = senior dev in the US, in terms of skillset and experience.. but YMMV)

(Of course that's simplified. Your full time devs need _some_ level of AI subscription as well + hardware so add a couple of hundred to their salary per month etc so you might only be able to afford 2x mid level devs, instead of 2.5)

[1]: https://palgad.stat.ee/en

[2]: https://www.palgakalkulaator.ee/en

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I'm currently working for an Estonian startup and we pay quite a bit more than that. We hire remote (primarily across Europe) and our biggest issue is finding the right people. You need to consider AI can be "hired" or "fired" instantly too, so it's better to compare it to contractor rates, which start at around €350/day or €7000/mo (20 working days) in Europe.

(Our team spend on AI devtools comes out to around $1500/person/mo)

Sure, we pay above market rate as well :) Doesn't change the fact that the average across Estonia is as stated :)

- Total cost for the employer: 6616.41€ [2]

This is a good start, but the calculation doesn't include office space and overhead (for every 100 developers there is maybe 5-10 support staff to cover the additional legal / administrative, and don't forget the extra cost in supervisor time to manage them)

Exactly, that's why I wrote that it's simplified and the actual full cost to the company depends on your company size and setup (fully remote vs in office, management heavy vs lean-flat etc). One point though, from personal experience, I'm spending an order (or two) of magnitude more time in "managing" an agent than I spend in managing employees - so that part might come out cheaper in the end for having actual employees ;)

Well you can just scale your AI employees up and down as much as you want. Companies already pay a large premium for freelancers just to be able to fire them on a whim, so spending 5-10k a month on something that more than doubles the productivity of a senior developer might be well worth it as you can just adapt spending based on your business needs. If you can deliver a feature that lets you write a 100k invoice with 10-20k of tokens within a month or have a senior dev crunch that out in 6 months instead I think it's clear who wins. It's all about money and the AI companies know that, they have their pricing down exactly to sit in the sweetspot where it hurts just enough that companies can still afford it but not enough that they would look for cheaper alternatives.

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