[mkozlows]

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]

> 10% of a developer's cost is something like $4000/month

What company pays developers $40000/month and are they hiring?

[pchristensen]

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.

[imtringued]

$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]

> Based on such a basic mistake

The mistake of 'h' instead of 'y' typo?

[pchristensen]

I didn't make those numbers up - here's a widely cited source from MIT: 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.

[christophilus]

Hm. I’ve been way, way underselling myself this whole time.

[oblio]

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.

[qurren]

> What company pays developers $40000/month

Meta, Google, Amazon, Apple, OpenAI, Anthropic, Netflix, Nvidia, to name a few

[dzonga]

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.