Apple overtakes Google, becomes first in yearly profit per employee

By on May 18, 2011, 2:00 PM

Apple is now king in terms of yearly profit per employee. In fact, Cupertino is miles ahead of many tech companies, including Google, Microsoft, Intel, Cisco, eBay, Adobe, Yahoo, Oracle, IBM, Amazon, HP, and Dell, as chosen by Pingdom.

Profit per employee is an interesting metric because it gives you a number that doesn't depend too much on the workforce of the company. This makes it easier to compare companies of different sizes.

Apple moved from $151,063 profit per employee in 2008 to $419,528 per employee in the past 12 months. This pushed it to first place, taking the crown away from Google.

This change did not occur because Google has been doing poorly, but rather because Apple's profits have been growing rapidly and it has never been this profitable before. In fact, Apple's profit per employee is 1.25 times that of Google's and 1.71 times that of Microsoft's, which is now in third place.

Since 2008, Apple's profit per employee has grown 2.8 times, Intel's profit per employee has doubled, Google's profit per employee has grown 1.8 times, and Microsoft’s profit per employee has grown 1.3 times. Yahoo actually seems to have become more profitable in the past couple of years, in spite of all the bad press. Cisco, eBay, Adobe, Amazon, and Dell have lower profits per employee now than in 2008.

It's also worth taking a look at total employee numbers. Apple has added more than twice as many new employees as Google in the past couple of years, but still managed to pass the search giant.

Yahoo has exactly the same number of employees now as in 2008, while Microsoft actually shrunk its operation by 2,000 employees. Meanwhile, HP's and IBM's profit per employee isn't very high likely because of the significant overhead required to run such large companies.

We're wondering what company will pass Apple in a few years. Will it be one of the companies already listed, a startup, or maybe a firm that still hasn't been formed.




User Comments: 15

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dedparrot said:

i thought i read it was Steam a couple of months ago.

Guest said:

i'm sure they are sharing it with all their employees - not

KG363 KG363 said:

Didn't you post that valve passed apple?

Technochicken Technochicken, TechSpot Paladin, said:

This does not take into account all the people involved in manufacturing Apple's products, though, since they are probably mostly Foxconn workers. Shouldn't the portion of Foxconn producing their products be counted? It seems unfair to compare Apple's per employee profits to Google's, for example, because Google employees themselves produce their products, while Apple's don't.

Relic Relic, TechSpot Chancellor, said:

I'm guessing Pingdom is only looking at public tech companies, as this Forbes article which you guys covered paints a completely different picture. Valve is valued in the billions with ~250 employees, which should give them a clear lead.

This does not take into account all the people involved in manufacturing Apple's products, though, since they are probably mostly Foxconn workers. Shouldn't the portion of Foxconn producing their products be counted? It seems unfair to compare Apple's per employee profits to Google's, for example, because Google employees themselves produce their products, while Apple's don't.

Ya, I'd imagine companies that outsource manufacturing like Apple will definitely look better with data skewed this way.

gwailo247, TechSpot Chancellor, said:

Technochicken said:

This does not take into account all the people involved in manufacturing Apple's products, though, since they are probably mostly Foxconn workers. Shouldn't the portion of Foxconn producing their products be counted? It seems unfair to compare Apple's per employee profits to Google's, for example, because Google employees themselves produce their products, while Apple's don't.

Yep. Not too hard to see why Apple is on top of that list. Since those people slaving away in the factories don't count as employees, both companies are essentially "buying" finished hardware at rock bottom prices, and marking it up to sell to the American consumer.

I am sure if they were to factor in the people making their hardware as employees, thus more accurately reflecting the reality of the situation, that number would drop by quite a bit. Since I doubt the average Apple employee makes half a million a year, there are probably 10 Chinese people hiding in the shadows of that particular statistic.

MilwaukeeMike said:

Looks like Relic is right.. but some quick accounting definitions so we're all on the same page. The forbes article says Valve is valued in the billions, and revenue was in the high hundreds of millions. Profit is at $55 million

Value of the company - estimate of what it could be sold for.

Revenue - Money that came in through the door.

Profit, - Money left over after paying all your taxes, bills and employees

According to that forbes article Valve would be at $220,000 profit per employee (55 mil / 250). while apple is at $419,000, which means they must have had total PROFIT of $19.5 billion. I checked Apple.com and they have reported $19.55 billion in profits over the last 12 months (april 10 through april 11). Note, that's not in 2010, like Valve's numbers, so we can't quite compare them. Apple over their fiscal year 2010 only had 11.44 billion in profit, or 245,493 per employee, assuming the same # of employees.

So looks like Apple is tops, unless Valve really picked it up in 2011.

Relic Relic, TechSpot Chancellor, said:

@milwaukeemike The $55 million figure is operating profit in 2005 on $70 million gross. As pointed out it's estimated that they earned ~billion in profit last year (2010), which I assume easily translates into the lower hundreds of millions on the operating side. That alone should put them over Apple per employee. But since Valve is private, they haven't exactly given out hard numbers here and I'm just speculating .

TekGun TekGun said:

Maybe if their products were priced, how can I put it, "fairly", there wouldn't be so much profit.

Inarius03 said:

Not surprising at all to hear this. Actually, surprised that this is just now happening.

Guest said:

@ technochicken

That is irrelevent as it is PROFIT per employee, not REVENUE per employee. This means that foxconns costs (aka cost of sales) to apple is already taken out of the equation.

Every one of these companies outsources contracts, particularly in the assembling of products.

tonylukac said:

If say the employees make $50,000 a year now, they can make $450,000 a year and Apple would still make $100,000 profit per employee.

Technochicken Technochicken, TechSpot Paladin, said:

@ technochicken

That is irrelevent as it is PROFIT per employee, not REVENUE per employee. This means that foxconns costs (aka cost of sales) to apple is already taken out of the equation.

Every one of these companies outsources contracts, particularly in the assembling of products.

What I'm saying is that the numbers do not accurately reflect the number of people involved in producing Apple products. Here's a hypothetical situation: If Google outsourced it's coding, it would pay more in operating costs, as the employer of the coders would charge a commission. However, Google's profit per employee would be drastically higher, because it's employee base would be cut in half or more. In that situation, profit per employee is not a very meaningful number when comparing it to a company who produces their products in house. For Apple, along with other companies, like HP, Dell, ect, the same applies.

captaincranky captaincranky, TechSpot Addict, said:

I think this stands as a " landmark tribute" to the stupidity of the American consumer.

See, companies make the big bucks when you're dumb enough to pay the asking price.

Not only that, people stand in line at apple product releases to do just that.

Steve Jobs must have been a Nigerian Prince in another life.

"If you don't have an iPhone, then you don't have an iPhone". Wull OK Stevie, I'll get right on that

Guest said:

It's Humorous to me that we are comparing "Competitively," a company who over charges for its products, with a company that does not charge at all for the majority of its products... Apple is like the guy who takes your shirt off your back, and you thank him for it...

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