Google's (GOOG) Hiring Spree Will Add $1 Billion In Costs This Year, But Investor Need Not Worry

Credit Suisse estimates that Google's (NASDAQ: GOOG) hiring spree will add about $1 billion in incremental employee expenses this year.

Google had previously announced that 2011 will be the biggest hiring year in company history. Using data from Glassdoor, Credit Suisse estimates a weighted average employee cost of approx. $100K per year. Factoring in a 25% increase in headcount, and the 10% increase in salaries, they get to an estimated $1 billion of incremental employee expenses in 2011.

Despite the added expense, Credit Suisse analysts are comfortable with their 2011 EPS estimate of $34.15.

Credit Suisse said despite concerns that Google spends too rampantly, there are signs of discipline. For instance the firm notes, "from 2005-2010, there is a 94% correlation between GOOG's net revenue growth and the growth in its workforce, implying GOOG hires to support growth. Alternatively, if historical patterns hold, accelerating new hires could be seen as a positive indicator for 2011 revenue growth."

Credit Suisse maintained their Outperform rating and $750 price target on Google.
For more ratings news on Google click here and for the rating history of Google click here.

Shares of Google closed at $610.98 yesterday.

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