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Congratulations, Google staff: $210k in profit per head in 2008

Google had $209,624 in profit per employee in 2008, which beats all the other large tech companies we looked at, including big hitters like Microsoft, Apple, Intel and IBM.

(As you may know, we have been taking a closer look at what kind of money some of the most well-known tech companies are making. The ones we have been looking at are Adobe, Amazon, Apple, Baidu, Cisco, Dell, eBay, Google, HP, IBM, Intel, Microsoft, Oracle, Sun and Yahoo.)


Correction to the numbers above: Baidu’s numbers are in Chinese RMB, not USD.

Some companies who have almost the same profit per employee:

  • Just over $30k: IBM, Yahoo, Amazon and Dell.
  • Around $64k: Oracle and Intel.
  • Around $120k: Adobe and Cisco.

A battle against overhead due to size?

One would imagine that the larger a company gets, the more difficult it becomes to minimize overhead and costs. For example, HP and IBM, by far the largest companies listed here in terms of sheer size, have a relatively low profit margin per employee.

In that sense Microsoft is doing a very good job considering that they are close to matching Google in spite of having 4.5 times as many employees. And of course, looking at overall profit for the company, Microsoft is way ahead of every other company on this list.

We’re definitely not financial analysts, but it seems to us that Google is doing a really good job keeping their company profitable even though they have grown so rapidly (Google just turned 10 last year).

Summary table for 2008

For those interested, here is a table with some more data, including the actual number of employees and the revenue per employee. The list is sorted by profit per employee:

Revenue and profit per employee in 2008 (in USD)
Company Employees Revenue per employee Profit per employee
Google 20,164 1,080,914 209,624
Microsoft 91,000 663,956 194,297
Baidu 6,397 499,961 163,844
Apple 32,000 1,014,969 151,063
Cisco 66,129 597,922 121,762
Adobe 7,335 488,056 118,856
eBay 16,200 527,238 109,844
Intel 82,500 455,588 64,145
Oracle 86,657 258,837 63,711
Dell 76,500 798,706 32,392
Amazon 20,600 930,388 31,311
Yahoo 13,600 530,037 31,199
IBM 398,455 260,080 30,957
HP 321,000 368,735 25,947
Sun 33,556 413,637 12,010

Correction to the numbers above: Baidu’s numbers are in Chinese RMB, not USD.

Further reading: You might want to check out our two previous posts in this little series, the first being about how much money these companies are making, and the second one being about how big they are.

Hat tip to Daniel Howard who asked us for the profit per employee numbers in the first place.

Data source: Google Finance

All the companies we included in this survey are publicly traded on NYSE/NASDAQ. Although Sun was recently bought by Oracle, we included it anyway.

Image credit: Tracy O.



No Comments

Is this FTE (full time equivalents)? I remember the first round of big layoff, Google let off a lot of contractors and this would certainly have skewed the figures.

Separately, I’ve seen a lot of my clients make redundancies but replace them with contractors. They do this to comply with head office requirements to reduce headcount.

I have a feeling that this is going to be the year that the antitrust regulators come down hard on Google. It’s getting too powerful, it has market inertia behind it, nobody else can compete, and Google has so far acted without restraint in acquiring companies and partnering. I predict the end of exclusive contracts with Google and partners. It’s just a matter of time.

These numbers are incredibly misleading. If you filter out Apple’s retail employees, they are far and away the most profitable per head. Of course, leave it to the Wall Street bozos to not think through stuff like this.

According to the number, profitability is much high at Microsoft rather than at Google. They might have the best number per head but Microsoft gets a higher margin on employee (~30%) rather than Google (~20%)

It really depends what figures matter the most to you and who you want to put in front first :-)

Some Large Companies in Japan seems to have much higher profit per head.
Nintendo’s Net income in 2008 is 257.342 billion Yen(about US$2.5 billion), with 3768 Employees.
(Source: http://en.wikipedia.org/wiki/Nintendo )
That means $660k per head.

You should do a comparison of some non-tech companies. It strikes me that at that lower end of the range ($20-30K EBITDA/employee), you could probably find retailers and cement companies with the same level of profitability.

Oracle’s FTE and FTE/Contractor workforce is, as of today, 76,312, including Larry. There are probably some contractors not included in that,but drips and drabs. So you’re around 18% off for O.

I’d have to say CraigsList. If you could count the profits made from the American Women Prostitutes who work for CraigsList.

The more interesting metric is expense per employee; treating employees well comes with a cost: http://www.zentu.net/snaps/exp.png

Google’s net income per employee (efficiency) has actually declined. In 2006 for instance it was maybe twice as much. Microsoft’s efficiency has stayed around the same.
This number suggests one reason why the Google hiring binge made sense.

@Emmanuel: Microsoft’s margin is indeed very high, higher than Google’s.

…is that net profit or gross profit? Either way, the numbers are pretty staggering!

Much higher at Nintendo see http://www.joystiq.com/2008/09/16/nintendos-profits-per-employee-are-higher-than-goldman-sachs/

Is this restricted to U.S. tech companies? Where is Research in Motion? 6 Billion in revenue in ’08, 10k employees. Assuming 20% profit you’re looking at 200k+ per employee. Ballpark numbers to be sure, but even if they are 30% off it still ranks near the middle of the list.

So, does that mean all the Google employees are getting either a raise or a nice bonus? No? Thought not.

Don’t congratulate the employees, congratulate the shareholders – the employees are obviously the ones not getting paid what they’re worth. :\

Infosys Fiscal 2009 : $13K per employee

A lol.

“We’re definitely not financial analysts, but it seems to us that Google is doing a really good job keeping their company profitable even though they have grown so rapidly (Google just turned 10 last year).”

“Data source: Google Finance”

Really.. You use Google. Everyone uses Google. No other search engine can get enough users before they go bankrupt. It’s what’s known as a “Monopoly”.

They have all the users, they make a small fortune. They jumped into free email, now cloud computing. Because everyone uses Google, anything they do will be more popular than another companies similar product.

Oh, and they read your emails as well as catalog your searches to send you targeted popups/ads. Which means their advertising has a higher rate of being clicked on. In other IT terminology, that’s illegal.

Shameful Nintendo wasn’t included, when it handily beats any of these companies on this category.

I think it’s great that Google is making gangbuster profits. But I’d like to know where they come from. They give away a ton of free software and services. I know search advertising is their bread-and-butter, but can search alone be the largest percentage?

Cool, I am a fereelancer and working on my own and made 57.000 EURO profit last year. So I was more sucessful than the first 7 companies is this statistic? Cool, really cool… ;-)

I wonder how Microsoft would fare if they counted all the “Microsoft Certified Professionals” as employees.

@Chris Google is truly an anomoly. Most everything they offer to the general public is free, and works pretty well. And yet they are very profitable by any standard. It seems like advertising is probably where they make their money.

I don’t have gmail, but having them catalog my searches helps them target advertising to me on products I might be intersted in. That’s good for me, it cuts down on the amount of crap I have to look at before I see something I might want. It’s good for advertisers they get their product displayed to more people who might be interested in it.

I remember the pre-Google days of searching the internet. Search results could be wildly different from engine to engine. Google managed to work it’s way to the top. Now they have to fend off preditors like Microsoft. I don’t like it when a company has undue control over peoples lives, but I don’t think Google has reached that point.

These figures are not even close to accurate, both google and MS would have easily half to three quarters of their FTE headcount in contractors at any stage.

Certainly Microsoft looks like a contraditction in this category considering its size. However, one must consider that MS maintains a world-wide monopoly and has not found it necessary to compete based on the merits of it’s products. In every instance where they have been forced to compete (video game consoles, MP3 players) or have not been allowed to suppress competition, they’ve fallen flat.

@Tom
Of course, the anti-trust goons will come after Google, they’re too big a target to resist. However, Google’s size alone does not make them guilty. The question is, has Google engaged in anti-competative practices to secure it’s position. The answer is no. As long as there are other viable entities in the search market which people may freely choose, Google cannot be deemed guilty of violating anti-trust statutes.

@ 墨尔本: YouTube is owned by Google!

Great work Google Employees. Thats true that its getting revenue from search ads. Best part is they segregated employees properly instead of laying off them in large numbers. Google claims that its people are very smart and full of innovative ideas which does increase its value.

Did anyone happen to look at RIM’s stats for their fiscal 2009? I am not a financial analyst, but it looks like they also rank at the top of this heap…

hi, I am a chinese business journalist who based in Silicon Valley. i am really very surprised to see that baidu’s profit is so large. you know i am from China and know this company very much, so I count it again just now. I found you made a mistake. the baidu’s 163,844 you mentioned is RMB, actually not dollars. So the position of baidu in this pic should be the NO.14, and after HP, before SUN. Their profit per head should be 24312.5 dollars.

I’m sorry to correct it. :)
Have a good weekend.

Great analysis. It gave me the idea to look at revenues and profits per employee for a few well known companies in the Tech industry but also in petroleum, finance or aerospace:
http://harryseldon.thinkosphere.com/2009/08/22/revenues-per-employee-sum-up-worlds-troubles

Revenues and profits per employee are definitely interesting measurements of global profitability.