NEW YORK (Bloomberg) - Mark Zuckerberg is going to need to find some more pinball machines and rock-climbing walls. The social networking company, known for its many perks that make it a regular on the hottest-places-to-work lists, is increasing headcount at an incredible pace.
Facebook, which reported Wednesday that sales fell short of estimates, passed the 10,000-employee mark last quarter. With a total of 10,082 at the end of March, Facebook increased headcount by 48 per cent compared with the same time last year.
Forty-eight per cent is an eye-popping number. Google doesn't report earnings until Thursday, but the company, which has been frequently questioned about its fast pace of hiring, grew only 12 per cent last year. Granted, Google is about five times the size of Facebook, but the online search company actually reduced headcount from the third to fourth quarter, due partly to the closing of its sale of Motorola Mobility to Lenovo.
When asked on the earnings call about Facebook's hiring spree, chief financial officer Dave Wehner said the company is basically beefing up everywhere, and that growth skews toward research and development. Those who follow the company shouldn't be too surprised by the increase in spending on hiring, and Wehner pointed to its expense forecast as if to say: We warned you. "We remain very pleased with our ability to attract and retain top-tier talent," he said.
Wehner said Facebook's high headcount growth over the last year was somewhat "inorganic" due to several large acquisitions, citing Oculus, LiveRail and WhatsApp. That doesn't really tell the full story. Those companies were tiny when Facebook bought them. Oculus was less than two years old with about 75 employees when Zuckerberg agreed to acquire the virtual reality goggles startup. LiveRail, an advertising company, had 170. WhatsApp, the US$19 billion messaging wonder, had 55.
Hiring really ramps up after Zuckerberg and his prized entrepreneurs sign the paperwork. "They hire massively," says Brian Wieser, an analyst at Pivotal Research. "It started with Instagram."
The photo-sharing app had just 13 employees in 2012 when it got snapped up by Facebook for about US$1 billion. Now there are some 200 people working on Instagram. That success story - 300 million people check the app at least once a month- and the other big spending that took place that same year have bought Zuckerberg enough goodwill to keep hiring, Wieser says. "To a large degree, Facebook has earned the right to invest."