Timeline: Employee Count Growth for Microsoft, Yahoo, Google, and Facebook
For large tech companies, the number of employees represents your bandwidth: How many products can you develop and maintain? How many big contracts can you land? How many products or ads can you sell? And so on.
I was curious how large technology companies grew their employee count over time. Early in successful startups, headcount growth is exponential, but how far would that continue in large companies?
Luckily, there’s a lot of information out there about how these companies grew: Books have been written recounting their early days, and in their S-1 IPO filings, and subsequent quarterly and annual reports, companies generally disclose the size of their workforces.
I collected this data for some of the iconic tech companies of our time: Google, Facebook, Yahoo and Microsoft. I also put together a Google spreadsheet with all the data and links to sources. This there what the graph looks like:
A few observations:
- Microsoft has been around for ages and consumes much of the timeline. It is also by far the largest. The big jump of employee count in 2014 is the Nokia acquisition, which was followed by layoffs, thus explaining the drop, but recently employee count has started growing again.
- Google/Alphabet was founded in 1998 and has been growing steadily ever since. There was a big bump in headcount in 2012 following the acquisition of Motorola Mobility. It has since then been sold off to Lenovo, but the underlying growth of the Google makes that seem like a blip.
- Yahoo’s growth stalled in 2007, likely around the time of the financial crisis, and then remained relatively constant around 14,000 until 2011 when headcount started decreasing due to layoffs. Most of company was acquired by Verizon in 2017.
- Facebook is a smaller tech company relative to the amount of press attention it gets. Compared to Microsoft’s workforce of 124,000, Facebook had just around 25,000 employees at the end of 2017.
Rather than calendar time, another way to look at these employee counts is time since incorporation. It’s a little hard to align the dates since the early days of each company have sporadic information with inexact dates, but here is my best approximation of headcount from founding:
But how quickly did these companies grow at the start? To answer this question, it’s useful to zoom in to the first few years from founding. Here’s the date for the first 8 years from incorporation, with trendlines:
Looking at the chart, it’s pretty clear that Microsoft was the laggard: The company was founded in 1975 and then started its rapid growth in 1980, going from 40 people to 182 in a single year. Google grew very quickly in its early years, faster even than Facebook. Yahoo grew as quickly as Google at the start, but then faced its first layoffs in 2001, which caused it to shrink, re-expand, and nosedive again.
Growth rates at these companies vary wildly: Microsoft grew 80% on average in the 1980s (49% percent if you don’t consider 1981, when the company more than quadrupled in size). For the 1990s, its average yearly employee growth dropped to 24%. Out of these companies, Facebook has had the most consistent growth rates, growing at 34–50% each year since 2010, with no big outlier years.
Large acquisitions are a common reason for high year-on-year growth. All these players have bought plenty of smaller businesses along the way. For example:
- Microsoft acquired the mobile hardware division of Nokia in 2013 which led to an increase of around 29,000 employees in that fiscal year.
- Google added 21,394 employees year-on-year after it acquired Motorola Mobility in 2012.
- Yahoo grew by 1000+ employees when it acquired Overture in 2003, thereby increasing its headcount by more than one-third.
- Facebook is the only standout in that even its high-value acquisitions were small in terms of headcount: WhatsApp which they bought for $19.6B had only 55 employees. When Instagram was acquired for $1B, there were only 13 employees.
If you want to take a look at the data behind these charts, here’s a Google spreadsheet with all the numbers and links to sources.