Facebook crossed the 10,000-employee mark last quarter, and it’s not stopping or slowing. Instead, the social network plans to raise its headcount at an incredible pace, says a report from Bloomberg. For the quarter ending in March, Facebook reported a headcount of 10,082, which was an increase of 48% from the same quarter last year.
Inorganic growth the real reason?
On being asked about the hiring spree, Facebook’s Chief Financial Officer, Dave Wehner, said the company is growing on each of the fronts, but the growth is more towards research and development. “We remain very pleased with our ability to attract and retain top-tier talent,” he said. Explaining reasons for the sharp rise in the headcount, the executive added that high growth in the headcount can partly be attributed to “inorganic” growth owing to several acquisitions such as Oculus, LiveRail and WhatsApp.
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However, the acquisitions contributed only a small amount to the overall headcount for the social network. When Facebook acquired the virtual reality headset startup Oculus, it was just two years old with about 75 employees, while the advertising company LiveRail had 170, and WhatsApp had only 55 employees, says the report.
Rise in Facebook headcount worth it
Experts believe the companies ramped up hiring only after their acquisitions. Citing an example, Pivotal Research analyst Brian Wieser says that the trend was first seen with Instagram. In 2012, when the social network acquired the photo-sharing app, it just had 13 employees, but since then the headcount has increased to 200. The stretch in the headcount is worth it as over 300 million people use the app at least once a month.
“To a large degree, Facebook has earned the right to invest,” Wieser says.
On the other hand Google, which is scheduled to release its next earnings report tonight, reduced its employee count from the third to the fourth quarter, primarily due to the sale of Motorola Mobility to Lenovo.
Apart from the headcount, other items that increased at an incredible pace were costs and expenses, which increased 83% to $2.61 billion on a GAAP basis, while on a non-GAAP basis, items increased 57% to $1.7 billion.
On Wednesday, Facebook stock closed up 1.21% at $84.63, and year to dates the stock is up by almost 7%.