Silicon Valley companies are more efficient at making money than traditional industries, as evidenced by net income and revenue per employee in their latest quarterly filings.
Facebook made $188,000 per employee last quarter, four times as much as Google
Both make way more than companies outside Silicon Valley.
Rani Molla was a senior correspondent at Vox and has been focusing her reporting on the future of work. She has covered business and technology for more than a decade — often in charts — including at Bloomberg and the Wall Street Journal.
Facebook, which employed 20,658 people this past quarter — a 43 percent increase over the same period last year — made the most profit per employee out of the companies we measured*: $188,498 per employee in the three months ending in June on revenue of nearly a half million per employee.
Facebook beats out Google parent company Alphabet by more than four times the profit per employee. Alphabet made $46,610 per employee in the second quarter.
And the social network is getting even more efficient at making money. In Q2 last year, Facebook profited $157,503 per employee. Note that Facebook employs numerous contract workers who don’t contribute to the employee count.
Twitter, which saw a net loss of $116 million last quarter, was at the other end of the spectrum, losing about $36,000 per employee.
Facebook’s efficiency is partly because software products don’t require humans at as many steps of the production and distribution process as companies creating physical objects that need to be mass produced and delivered to stores or doorsteps. Of course, even jobs formerly assigned to humans are coming under the purview of robots — so more industries could see consolidation of labor.
Companies like Amazon and its brick-and-mortar counterpart Walmart have employee counts that include part-time workers and are orders of magnitude bigger than their peers, which necessarily dilutes their profit and revenue per person.
As far as tech companies, their contribution to the wider economy isn’t entirely clear. Productivity in the U.S. has been flat as we struggle to measure the economic output of internet technology, whose services are largely free.
* Our research is restricted to select major companies that have reported their employee count in their latest quarterly earnings (companies only have to do so in their annual report). We did not include Apple, for example, because they do not have a quarterly updated headcount.
Here’s the dataset behind the revenue and profit per employee:
Quarterly employee count, net income and revenue
Company | Employee count | Net income | Revenue |
|---|---|---|---|
| Alphabet | 75,606 | $3,524,000,000 | $26,010,000,000 |
| Amazon | 382,400 | $197,000,000 | $37,955,000,000 |
| AT&T | 260,480 | $4,014,000,000 | $39,837,000,000 |
| 20,658 | $3,894,000,000 | $9,321,000,000 | |
| Ford | 203,000 | $2,050,000,000 | $39,853,000,000 |
| Microsoft | 124,293 | $6,513,000,000 | $23,317,000,000 |
| 3,200 | -$116,488,000 | $573,855,000 | |
| Verizon | 163,400 | $4,478,000,000 | $30,548,000,000 |
| Walmart | 2,300,000 | $3,152,000,000 | $117,542,000,000 |
The companies, Recode analysis | Note: Amazon and Walmart employee counts include part-time workers. Data are for calendar Q2 2017 except Walmart data, which is for its quarter ended in April.
This article originally appeared on Recode.net.
