The cost of employing someone is roughly double their salary, once bonuses, benefits, payroll taxes and overheads are considered.
Plus for many companies, RSUs can be an additional significant fraction or even multiple of base salary.
So it's a lot of money, but would pay for fewer jobs than you might think.
It's also possible - I have no idea - that the marketing featuring McConaughy made more money in new sales than it cost. I assume this was the expectation for the deal.
> The cost of employing someone is roughly double their salary, once bonuses, benefits, payroll taxes and overheads are considered.
This is for a good job. Temp agencies often pull about 30% of the total payment for each temp and permatemp they employ at another company. And they make a profit off of that overhead.
And I don't know about the jobs at Salesforce, but I find it odd that the person you're replying to assumed an average $125k per job. That's a really nicely compensated job, even if the $125k is total compensation, not just salary.
Temp agencies have very low overheads. They aren't even paying for the electricity and toilet paper their placements consume at work, let alone medical insurance.
Glassdoor says $138K base and $184K total comp at Salesforce for a SWE, with Senior SWE 10% higher.
Can you cite this figure? I'd like to know where the additional funds go for an average employee. Is this including things such as material expenses (photocopy paper, utility bills, etcetera)? Because that's the only way I could imagine the 2x happening. And this will have huge variation depending on the type of job.
The biggest overhead costs are: 1) employee health insurance 2) employment taxes 3) employee benefits like 401K matching 4) real estate costs for offices. Photocopy paper isn't even a rounding error on a rounding error.
It used to be 1.5x. And I was just wondering where the 2x came from. The non-office space expenses for me add up to maybe an additional 40%. If I was in a better health plan it might theoretically go up to 50%. Tack on expenses for the non-pension retirement plan manager and HR jobs to support employees and I can maybe get to 1.6x. But 2x+ doesn't happen until factoring in consumable and other expenses needed for my job. So I think that has to be a big part of it.
For the 3 months ending in January 31 2023 page 6 has $5.927 billion in operating expenses. Subtract out the $0.828 billion in restructuring costs for $5.099 billion in above the line expenses. For about 80,000 employees this means about $255,000 in expenses per employee.
I've never read a 10k before so I hope I'm doing it right.
Assuming all of those expenses go away with the employee (which will obviously not be the case), laying off 8,000 employees would save an average of about $2 billion per year.
This is the big takeaway from the 10k filing, and I wonder if it changed in the last two months: "Announces Share Repurchase Program increased to $20 billion".
Plus for many companies, RSUs can be an additional significant fraction or even multiple of base salary.
So it's a lot of money, but would pay for fewer jobs than you might think.
It's also possible - I have no idea - that the marketing featuring McConaughy made more money in new sales than it cost. I assume this was the expectation for the deal.