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Microsoft Earns $177,000 Per Employee

Deo Melgaco has a fascinating set of posts looking at Wal-Mart and Microsoft and the costs associated with employees. The highlight is the chart that shows the annual net income for the two companies, plus Oracle and Costco, compared with the number of people employed. Microsoft profitted to the tune of $12.6 billion last year on 71,000 employees, earning $177,450 per employee, while Wal-Mart earned $11.3 billion on 1.9 million employees, a profit of just $5,938 per employee.

Talk about inefficiency!

After looking at those numbers, I don’t see how you could argue Wal-Mart needs to pay its employees more or give them health benefits. As is, Wal-Mart cannot afford to both issue pay raises and continue to operate as a healthy company, because their income per employee is practically a sick joke. Wal-Mart already needs to find a way to fire many of its employees and operate more efficiently, and if it paid them better or offered benefits, that would force them to find a way to mass-fire employees even faster.

With 1.9 million jobs at stake, the idea of them firing half those people (which they should, if they want to be more efficient) is a scary one for how it would effect the economy.

I tell you this, if Wal-Mart fired 900,000 people, the illegal immigration debate would end as nearly a million Americans would do whatever necessary to take those jobs from illegal immigrants that you always hear Americans aren’t willing to work. That many unemployed, both the workers and the legislative bodies will find a way to enforce illegal immigration legislation and give those low-paying jobs to legal workers. And without the jobs for the illegal workers, I’d imaging illegal immigrant amnesty legislation loses its purpose in Congress.

Anyway, how did this turn into a political discussion? The point is, Wal-Mart earns just north of nothing per employee, Microsoft makes enough to pay everyone handsomely. The numbers on Google on even better, $288,270 per employee ($3.1 billion on 10,674 employees) while Yahoo makes considerably less, just $65,911 per employee ($751 million on 11,400 employees).

Deo also calculates Wal-Mart’s costs due to a 40% turnover rate at $1.36 billion per year.

July 17th, 2007 Posted by Nathan Weinberg | Corporate | 5 comments

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  1. not that you care, but you just lost my readership
    if i want rambling clueless political babble i’ll turn on Fox News
    keep yourself focused on MICROSOFT and the computer industry in general

    Comment by tate roam | July 17, 2007

  2. Nathan, the net income per employee is more startling if you consider the fact that this number is after their salaries have been paid. Microsoft actually made almost $540,000 revenue per employee. Walmart on the other hand, made almost $47,000 per employee in revenue. So Microsoft’s net income to revenue per employee is 32% while WalMart’s is 12%. (These are all approximate numbers)

    Interesting comparison.

    Comment by Mark | July 17, 2007

  3. You know, the more I read this post, the less I like it. I shouldn’t get too political here, even on my own blog. I’d withdraw the post, but I’m not that kind of person.

    You know what it is? I read this book on illegal immigration over the weekend, and it made quite the impact on me. I’ve got immigration on the brain, sorry.

    I’ll stick to news and news analysis in the future.

    Comment by Nathan Weinberg | July 17, 2007

  4. […] the whole story: » Microsoft Earns $177,000 Per Employee »  InsideMicrosoft - part of the Blog News Chann… Technorati tags: Wal-mart, Costco, emplyee rights, benefits, economics, […]

    Pingback by When Inefficiency Pays off | July 18, 2007

  5. […] The wide gap of employee to profit values when comparing Microsoft to Wal-Mart. Interesting. Me thinks Wal-Mart needs to restructure a few things. […]

    Pingback by Pondering For 2007-07-18 » Ponderings Of Guy | July 19, 2007

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