4 ms·

10% of a developer's cost is something like $4000/month. Many companies are complaining at a point that's well, well below that. (I think they are being irrati

10% of a developer's cost is something like $4000/month. Many companies are complaining at a point that's well, well below that. (I think they are being irrational, and that the mental model they have of AI costs -- "how much are we spending on tooling for this developer?" -- is going to shift over time to something more sensible, but those kinds of short-sighted companies are the ones that are having cost panics.)

bluefirebrand 3mo ago
> 10% of a developer's cost is something like $4000/month What company pays developers $40000/month and are they hiring?
- pchristensen 3mo ago
  A company's fully loaded cost (payroll taxes, insurance, fixed company costs, infra, real estate, etc) is usually about double the employee's salary. Half of $40k is 20k/mo, which is ~$250k/hr. That's a lot but very in-bounds for software engineering salaries.
  - christophilus 3mo ago
    Hm. I’ve been way, way underselling myself this whole time.
    - oblio 3mo ago
      Not necessarily. Those jobs are very hard to get and you have to live in the right places. At most 1% of software devs will make that much, at any point in their careers.
  - imtringued 3mo ago
    $250k/hour is half a billion USD per year. Nobody is paid that much. Based on such a basic mistake, I wouldn't trust the rest of your comment. Everything you listed feels like made up arbitrary excuses. Most of the overhead per employee is fixed, that doubling rule of thumb is assuming an employee with a salary closer to the median. At the salary you're claiming, the overhead shrinks to something like 30% on top of the base salary. If anyone took your numbers seriously they would run into the weird conclusion that an employee paid $50k actually costs a company $300k. That's the type of math error you're doing here.
    - ido 3mo ago
      > Based on such a basic mistake The mistake of 'h' instead of 'y' typo?
    - pchristensen 3mo ago
      I didn't make those numbers up - here's a widely cited source from MIT: https://nutsandbolts.mit.edu/BBJ/EmployeeCost.php https://nutsandbolts.mit.edu/BBJ/EmployeeCost.php Overhead is not fixed per employee - things like taxes and benefits scale with salary, not to mention the cost of tooling (hardware, software, AI token budget, etc) tend to be higher for higher-compensated employees. You definitely shouldn't plan your business based on my comment, but you'd be foolish to ignore it.
- qurren 3mo ago
  > What company pays developers $40000/month Meta, Google, Amazon, Apple, OpenAI, Anthropic, Netflix, Nvidia, to name a few
  - dzonga 3mo ago
    majority of software engineers are not employed at those companies but rather at banks, small / medium startups etc. we need to start using that median instead of using salaries from the Magnificent 7.

bluefirebrand 3mo ago

> 10% of a developer's cost is something like $4000/month What company pays developers $40000/month and are they hiring?

pchristensen 3mo ago
A company's fully loaded cost (payroll taxes, insurance, fixed company costs, infra, real estate, etc) is usually about double the employee's salary. Half of $40k is 20k/mo, which is ~$250k/hr. That's a lot but very in-bounds for software engineering salaries.
- christophilus 3mo ago
  Hm. I’ve been way, way underselling myself this whole time.
  - oblio 3mo ago
    Not necessarily. Those jobs are very hard to get and you have to live in the right places. At most 1% of software devs will make that much, at any point in their careers.
- imtringued 3mo ago
  $250k/hour is half a billion USD per year. Nobody is paid that much. Based on such a basic mistake, I wouldn't trust the rest of your comment. Everything you listed feels like made up arbitrary excuses. Most of the overhead per employee is fixed, that doubling rule of thumb is assuming an employee with a salary closer to the median. At the salary you're claiming, the overhead shrinks to something like 30% on top of the base salary. If anyone took your numbers seriously they would run into the weird conclusion that an employee paid $50k actually costs a company $300k. That's the type of math error you're doing here.
  - ido 3mo ago
    > Based on such a basic mistake The mistake of 'h' instead of 'y' typo?
  - pchristensen 3mo ago
    I didn't make those numbers up - here's a widely cited source from MIT: https://nutsandbolts.mit.edu/BBJ/EmployeeCost.php https://nutsandbolts.mit.edu/BBJ/EmployeeCost.php Overhead is not fixed per employee - things like taxes and benefits scale with salary, not to mention the cost of tooling (hardware, software, AI token budget, etc) tend to be higher for higher-compensated employees. You definitely shouldn't plan your business based on my comment, but you'd be foolish to ignore it.
qurren 3mo ago
> What company pays developers $40000/month Meta, Google, Amazon, Apple, OpenAI, Anthropic, Netflix, Nvidia, to name a few
- dzonga 3mo ago
  majority of software engineers are not employed at those companies but rather at banks, small / medium startups etc. we need to start using that median instead of using salaries from the Magnificent 7.