There are probably a multitude of reasons.
But let me suggest one reason I learned when I was an exec in a F500 tech company:
- Headcount was most fixed for a year. But,
- Budgets were more elastic and flexible.
Top tech companies might employee 10,000–30,000 or more employees. That sounds like a lot, and it is.
But then it all gets broken down into divisions and groups.
Our group had a fixed headcount of about 800 to manage about $800m in revenue. That was about it. Getting even a single additional headcount was incredibly difficult. Expenses were set annually to manage to an overall plan, and it was very hard to change them. Especially allocated headcount.
But … we had a lot of budget. For marketing. For promotion. For sales activities. Etc.
That budget can go a lot of places. Oftentimes, it can go into contractors and temporary hires. Even if your “headcount” is fixed, capped and frozen.
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Jason Lemkin, Khareem Sudlow
