Nvidia, the world’s most valuable company, boasts a market capitalization of around $3.5 trillion with just 36,000 employees. This translates to a staggering $90 million per employee, significantly outpacing competitors like Broadcom and dwarfing Apple and Microsoft.
Deutsche Bank research strategist Jim Reid has been exploring whether today’s largest companies are employing fewer people than in the past. By analyzing America’s most valuable companies since 1950, Reid found that “employment density” goes through cycles. While some might assume a shift toward smaller employee rolls due to technological advancements, history suggests otherwise.
Reid examined companies like General Motors and Eastman Kodak, which had enormous workforces at their peak but saw significant declines in workforce size when they surpassed these companies in market value. However, Nvidia’s 36,000 employees is comparable to that of oil company Amoco in the late 1970s, which achieved its market cap surge with only about 50,000 workers.
A historical example that closely resembles Nvidia is Cisco. Both are “operationally lean,” reliant on intellectual property and engineering talent, and outsource labor-intensive aspects of production. This analysis offers relief to those concerned about mass unemployment due to artificial intelligence replacing human workers.
Reid concluded that while the way people are employed continues to evolve, the distribution across firms and sectors is constantly changing.
Source: https://www.investopedia.com/here-s-the-staggering-per-employee-value-of-nvidia-11749076