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Isn't employee salary the #1 expense for most tech companies? And isn't the rule of thumb about $160,000 per year per employee on average, and that's assuming h
by codinghorror 14y ago
Isn't employee salary the #1 expense for most tech companies? And isn't the rule of thumb about $160,000 per year per employee on average, and that's assuming high-end engineer types? By that metric they'd need $16 million per year just to pay salaries. $45 million income is 2.8 times what's needed for salaries, which leaves plenty for profit.
- krogsgard 14y agoI almost went down that route. I interact with a lot of Automattic employees, and all of them are extremely talented. I'm not sure what they get paid, but I tend to doubt it averages $160k, because if I were Automattic I'd probably pay relative to where the employee lives. And even though I'm sure most of them could command top dollar where they live for what they do, I'd bet in most parts of the world it comes out to less than $160k / year, because most parts of the world just are not as expensive as SF. Also, I'm pretty sure they have thousands and thousands of servers. I have no idea how much that costs, but an uneducated guess would be that it's not as much as the $16 million in salaries you mention. So... $45 million - $32 million for salary and servers is indeed a hefty profit.