Here’s why tech companies have so many employees:
The reason some tech companies have a lot of employees is that those companies do a lot of things.
Software development can involve a lot of people in the project.
If you add in tech support, marketing, expansion, and administration, it’s easy to see why there would be a lot of employees at any given time.
So if you want to learn all about why tech companies employ so many employees exactly, then this article is for you.
Let’s jump right in!
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Why Do Tech Companies Have So Many Employees?
This is an interesting question because tech companies don’t necessarily have a lot of employees.
Microsoft was founded by two people working out of a garage. Literally.
Now, today, Microsoft employs more than 180,000 people, so that’s a big organization, but it definitely didn’t start like that.
So, we should probably spend a minute really thinking about this.
In fact, it’s not surprising that tech companies can work with smaller crews than other types of business.
An app can have a single developer and then be downloaded by millions of people.
That ratio is pretty crazy.
Compare it to Walmart, and there’s a complete change.
Walmart stores need a lot of people to handle the merchandise and complete the transactions, so the ratio of workers to customers is a lot higher.
With all of this in mind, I can’t say that tech companies have a lot of employees.
I can’t even say that the average tech company has a lot of employees.
Instead, I can say that some tech companies have a lot of employees.
When that’s the case, there are two reasons.
The first is business growth, which is the same as any other industry.
Microsoft does a whole lot more than it used to, so of course more than two people work for the company.
The second reason has to do with the unique complexity issues that arise with tech companies.
Let’s talk about that.
Tech companies, for the most part, are making hardware, software, or some combination of the two.
As a company sees success and enjoys sustained growth, it’s going to expand what it does and how it does it.
In that way, you can expect to see tech companies grow like any other business, so major tech companies are unsurprisingly able to employ thousands of people.
But, tech comes with something a little different.
No matter how many gyms you open, the concept of the gym doesn’t completely evolve.
You can run the same business model for a long time, and you get this idea of linear growth.
The company grows by the number of employees it takes to open a new gym.
Sure, some new gyms might be bigger and have more features (and thus more employees), but the gist is the same.
Software development is quite different.
Software grows more complicated over time.
If you compare Microsoft Word from today to what it was 20 years ago, the software has more lines of code.
It takes more engineers and programmers to maintain (much less improve) the software.
Because of this, tech companies are known to experience exponential growth at times, and it’s in order to keep up with the increases in the complexity of their products.
If they expand the product lineup at the same time, then obviously, they’re going to have to hire a lot of people.
What Are Common Areas of Employment at Tech Companies? (6 Departments)
Maybe a better way to understand why tech companies have so many employees is to take a look at what the employees do.
It turns out that a major tech company does a lot of things.
Some are pretty obvious, but others are easier to overlook.
As you go through the list, try to remember that all of this is happening at the same time at most major tech companies, and it adds up fast.
#1 Software Development
Tech companies do a lot of things, but software development is definitely at the forefront.
Whether a company is making databases for cloud deployment or simple apps for the app store, a lot of employment is devoted to software development.
What you might not realize is that this often involves multiple teams of people carrying out specific jobs, all at the same time.
Design is exactly what it sounds like.
Software engineers have to figure out what the software should do (hardware engineers do the same for designing devices).
In order to do that, they might meet with businesses, clients, or customers to discuss what they want and need.
Then, they have to conceptualize the idea. From there, they develop a plan to make the product.
So, for something as complicated as the Alexa assistant, you can bet that multiple engineers ran multiple teams just to get through the design phase.
After design, you have to actually make the thing.
Sticking with the Alexa example, it takes a lot of lines of code to make something like that functional.
So, you’re looking at multiple programming teams to get through it all.
After all, how long would it take you to write the millions of lines of code in the digital assistant?
Taking on a project of that size requires a large crew.
Even after construction, the software requires extensive testing before it goes to market.
Can you imagine how hard it would be to fully and adequately test something as advanced as Alexa?
So, once again, we find the need for large teams so that they can handle the enormity of the job.
Even after the software is released, it needs updates.
Updating software might not be as hard as building it from scratch, but it still takes a lot.
Engineers are employed simply to track and analyze emerging problems.
Additional experts are around to create fixes for found problems.
Those fixes have to be tested.
And, you need crews that can deliver the updates and keep everything moving.
#2 Customer Relations
All of that just covers software development.
There’s still a lot more involved with tech companies, and customer relations often takes up the largest role, when it comes to the sheer number of employees.
Customers have thoughts, and they want to express those thoughts.
While you can offload some of that on chatbots and other automation, you ultimately need people working with customers to keep them happy and understand what they really want and need.
They also need support.
AppleCare might be the largest tech support organization in the world.
Even if that’s not quite the case, it’s huge.
Apple employs around 13,000 people just to provide tech support to its customer base.
Even for smaller organizations, tech support is going to require personnel.
#3 Management and Administration
All of these positions require management.
Someone has to make the work schedule, make decisions for the operations, replace employees who leave, and do all of the rest of the management and administrative work.
Here’s an interesting thing about administration.
It grows faster than the rest of the company, and it’s easy to see why.
Imagine you start your own company.
At first, it’s just you.
So, the schedule is simple.
Then, you add another person.
Now, you want a schedule where you can alternate responsibilities to be open or available a little more, but it’s still simple.
Add a third person, and things are suddenly a lot more complicated.
Who gets what days off?
What hours can you reasonably supply?
What happens when someone is sick?
The fourth person makes things even more complicated.
Now, think about the 80,000 people who work for Apple in the United States.
It’s going to take a lot of administrative power to make a machine that large and complex function properly.
We’re still not done.
If you make a product, you probably want to sell it.
Some things might market themselves, but that’s not the norm.
Most companies invest in marketing in order to make more money, and tech companies are no exception.
So, that’s even more people on staff.
#5 Research and Development
As a tech company grows, it’s going to want to expand its product line.
That usually leads to research and development.
After all, tech companies are still expected to be innovators.
That means a lot of major tech companies invest in research and development, and that means even more employees.
This might not be universally true for all tech companies, but there’s definitely a precedent of such companies heavily diversifying what they do.
Google is the prime example. Or, more accurately, Alphabet is the best example.
For those who don’t know, Alphabet is the parent company that owns Google.
And, Alphabet is known for heavily investing in a bunch of small and startup companies.
The general idea seems to be, if they can invest in enough different ideas, then any that succeed add to the parent company’s total value.
Since Google search and ads generate so much revenue, Alphabet feels like it can take chances with some of its extra cash.
Those chances are expressed in diverse investments in smaller companies, and Alphabet has a chance to own the next great tech idea before it really takes off.
All of this is to say, such investment requires management, and if you acquire small companies, then your total number of employees increases.