In the fourth quarter of 2025, 115,931 people worked at the Federal Employment Agency. NVIDIA, the leading supplier of computing chips for the current AI wave, had only around 42,000 employees worldwide at the end of its fiscal year on January 25, 2026. The German Pension Insurance also has considerably more staff than NVIDIA, with about 63,000 full-time employees.
These figures do not prove waste, but they do reveal a difference that is often overlooked in debates about the state: NVIDIA has to justify its economic scale through voluntary purchases and capital inflows in the market, while public authorities and social insurance providers receive their responsibilities and funding through legislation.
More employees than the most valuable companies
Comparing the number of employees at public authorities and state institutions with companies in the private sector may be striking, but it should not be mistaken for a simplistic productivity ranking. The Federal Employment Agency does more than place jobseekers. It also pays unemployment benefits, administers support programs, assists with basic income support, and operates the family benefits office. The German Pension Insurance, by contrast, calculates pension entitlements, pays pensions, and provides rehabilitation benefits. These are important social responsibilities of the state and entirely different from developing and selling chips.
The Federal Employment Agency reports 115,931 employees and 101,277.4 full-time equivalents for Q4 2025. The German Pension Insurance reports around 63,000 full-time equivalents across its 16 providers as of June 30, 2025. NVIDIA reported approximately 42,000 employees at the end of its fiscal year on January 25, 2026. Using these rounded figures, the agency’s staffing capacity is about 2.4 times NVIDIA’s reported headcount, and the pension insurer’s about 1.5 times. Together, the two public institutions amount to roughly 164,300 full-time equivalents, or 3.9 times NVIDIA’s reported employee count. This is a comparison of scale, not productivity: the dates, organizational scope and measures (full-time equivalents versus headcount) differ.
| Organization | Employees | As of |
|---|---|---|
| Federal Employment Agency | 115,931 people, or 101,277.4 full-time equivalents | Q4 2025 |
| German Pension Insurance overall | around 63,000 full-time employees | June 30, 2025 |
| NVIDIA | around 42,000 employees | January 25, 2026 |
Sources and context: The Federal Employment Agency’s 2025 annual report lists 115,931 employees and 101,277.4 full-time equivalents for Q4 2025. The German Pension Insurance statistics give its workforce, converted to full-time equivalents, as around 63,000 on June 30, 2025. NVIDIA reported around 42,000 employees in its fiscal 2026 Form 10-K. The dates and reporting scope differ, so these ratios are approximate.
However, NVIDIA also has large parts of its manufacturing carried out by contract manufacturers, whose workers are not included in its own employee headcount. The company’s employee count therefore does not cover the entire value chain. Conversely, it would be just as wrong to dismiss every job at a public authority as pure administration.
NVIDIA has to defend its scale in the market
In fiscal 2026, NVIDIA generated revenue of 215.94 billion US dollars and net income of 120.07 billion US dollars. These figures are not directly comparable with a public authority’s budget, but a company has to demonstrate year after year that customers buy its products and investors provide additional capital. If a chip fails to impress, a platform becomes too expensive, or a competitor delivers better technology, revenue and profits fall. The effects are then reflected directly in the balance sheet, can have a significant impact on the company’s share price, and may eventually reach and be felt by its employees as well.
This is a typical market correction mechanism: bad decisions become visible through prices, losses, layoffs, and withdrawals of capital. NVIDIA cannot justify its size solely by arguing that its activities are important. It has to find demand and create a good offering in order to remain in business. The feedback works differently for public authorities: contributions to statutory unemployment insurance are collected through social insurance and thus from employees’ earnings, while benefits are defined by law and responsibilities are directed by political decisions. A public authority cannot simply dissolve its organization because some contributors are dissatisfied with its performance. Contributors remain contributors—whether they want to or not.
The Federal Employment Agency administers more than unemployment
The Federal Employment Agency’s annual report shows the scale of this system. In 2025, revenues of 47.81 billion euros were offset by expenditures of 52.04 billion euros. The financial year ended with a deficit of 4.23 billion euros, meaning the government’s budget plan was exceeded by that amount. A significant share of the additional expenditure went to unemployment benefits, short-time work benefits, and insolvency benefits. This is initially no surprise during a weak economy, but it shows that the agency cannot respond to falling demand like a company by refining its offering or even discontinuing it.
A total of 11.42 billion euros was reported for personnel, administration, collection-cost reimbursements, and services in the areas of basic income support and unemployment insurance. This sum also shows the scale the ongoing organization has now reached. The Federal Employment Agency does not just employ job placement officers; it bears a large part of the infrastructure through which political entitlements are reviewed, calculated, and paid out.
This is precisely where the real criticism lies: when new programs are adopted, they do not just create a benefit for citizens. They create applications, reviews, decisions, appeals, IT systems, and areas of responsibility. This additional administrative apparatus created by political decisions is funded through contributions, taxes, and future budgets. That does not mean every benefit provided by the Federal Employment Agency should be abolished. The issue is the lack of separation between insurance, redistribution, and labor-market policy. Once everything is housed in one institution, the agency grows, while it becomes increasingly difficult to see which part is based on contributions and which on political objectives.
The pension insurance system is no proof of bureaucracy
The criticism of the scale of administration is less convincing in the case of the German Pension Insurance: the organization as a whole most recently employed around 63,000 full-time staff. At the same time, total expenditure in 2025 was 426.5 billion euros. Administrative and procedural costs amounted to 5.65 billion euros, or around 1.3% of total expenditure. Such a share contradicts the claim that statutory pensions are primarily consumed by their own administration. Measured against total expenditure, this is not an unusually high administrative share.
The criticism again begins elsewhere: in 2025, the German Pension Insurance collected around 321.6 billion euros in contributions and generated total revenue of 422.6 billion euros. However, the contributions do not create a freely available pool of capital that belongs to the individual and that they can manage themselves. They establish a statutory entitlement against a system whose rules can be changed by parliaments.
That does not automatically make pension insurance worthless or unnecessary. It serves a social and political function. But it is not the same as personal property. Paying contributions for decades does not give someone a share, a securities account, or an inheritable stake in the amounts paid in. The administration can operate efficiently and still manage a system in which contributors have little freedom of choice and no individual title to the property.
The state does not need to lose customers
The size of a public authority does not depend only on the number of its tasks. It also depends on how those tasks are funded and controlled. A company that continues to employ more people than its customers pay for loses money. A public authority, on the other hand, can be given additional responsibilities when the legislature creates new entitlements or expands existing benefits. The political benefit is immediately visible, while the funding is spread across millions of contributors and taxpayers.
The economist William A. Niskanen described bureaucracies* as organizations whose leaders may have an incentive to expand their budgets. This does not mean that every employee acts out of self-interest or deliberately does poor work. It is about the structure: a public authority does not sell its services at a market price, and its users cannot simply switch to a competing provider. Budgets, staffing, and responsibilities are negotiated through political processes.
This also explains why the comparison with NVIDIA is so appealing. The company employs fewer people even though its products support a global infrastructure industry. However, it cannot defend its position by pointing out that chips are socially important. NVIDIA has to turn demand into revenue. The Federal Employment Agency and the German Pension Insurance are primarily required to carry out statutory tasks. Whether those tasks go too far is not decided by losing customers, but through elections, budget negotiations, and lobbying.
What a freedom-oriented reform would need to examine
A genuine political reform should therefore always ask which tasks need to be organized by the state in the first place. Insurance benefits, political redistribution, and general economic support do not belong together. Benefits not tied to contributions should be paid openly from the federal budget. That would make it clear which costs result from a political decision and which from an insured event.
Second, public authorities should report their performance using metrics that are understandable outside their own administration: cost per case, processing time, error rate, success rate of appeals, and labor-market outcomes. This creates transparency and meaningful benchmarks.
Third, retirement provision needs more competition and more personal ownership. Part of the current pay-as-you-go system cannot simply disappear, because current pensions have to be funded. In the long term, dependence on political promises can be reduced only if some contributions flow into transferable and inheritable asset claims. Decisions about risk, costs, and providers should always remain transparent. A state-run investment account with rigid rules is not genuine freedom of choice.
The state sets the wrong incentives: public systems have moved far away from a normal market. Those who have to sell their services voluntarily receive feedback every day. Those who administer entitlements by law can grow for decades without a single customer cancelling the system. The state can organize important services through public authorities, but faces less pressure to limit tasks, make costs visible, and allow alternative providers so that any problems can be identified early and addressed accordingly.
