A new metric called “revenue per employee” seems to be behind tech layoffs, claimed Instagram user @prashpectives. However, commenters of his shared short video said that the new metric isn’t entirely new. In fact, it has been present for decades.
What’s new is that, with the presence of artificial intelligence (AI), companies are expecting a much higher RPE, with one commenter saying that tech layoffs actually stem from companies comparing “revenue per bot vs revenue per employee”.
User @prashpectives defined RPE as the total revenue of a company divided by its total number of employees in a year.
Citing examples, he shared that Indian multinational technology company Tata Consultancy Services (TCS) makes about US$50,000 (S$63,500) in revenue per employee, while Amazon makes around US$500,000 per employee. Now compare that to an AI-native company like Anthropic, which pulls in a mind-boggling US$2.15 million per employee — that’s a 10 times to 50 times difference.
He explained that while investors used to care about growth rate, total revenue and even profitability, now they just want “efficiency.”
“Every employee needs to justify their cost by driving revenue.” This, he says, is why companies are cutting middle management, kicking out non-revenue-generating teams and flattening their structures. It’s also why tech stocks have been crashing in the US and India, as investors believe companies can boost revenue per employee using AI tools like Claude Code.
Advising tech workers on how to avoid being laid off, he offered two tips: move towards “safer” revenue-generating roles, like sales and product engineering, and become AI-natives.
He adds, don’t simply use AI tools — use them in a way that “genuinely” amplifies your output. One person doing the work of three with the use of AI will be the one getting rewarded with the new “revenue per employee” metric.
While AI is often marketed as a way to make work easier and faster, the market right now is focused on “extracting more productivity,” he said. To survive, workers need to adapt. /TISG
