That's a laughably low amount. If it were that cheap, reddit would throw out all unpaid mods and do it themselves. That's less than 1% of their revenue, and they would have total control over their site, that would be a bargain. That would be 200 minimum wage workers full time. I'm pretty sure 200 fulltime workers is waaaaaaaayyyyyy too few to moderate ALL of reddit.... (and this is just looking at time investment, never mind experts in their field moderating subreddits about very specific topics.)
Reddit boasts about 400.000.000 users, so with 200 mods, that would be... 1 (minimum wage) mod per 2 million users... Yeahhh... that's gonna work XD
Somebody above quoted an old ModSupport post that said there were over 70K moderators, and that was on 2017, without the free mods Reddit will just not be able to replace them at all
And the biggest advantage of Reddit is that you have a variety of communities with a variety of rules. Some don't allow off topic posts or comments, some vet every single top level comment.
If these were all paid employees, they couldn't keep up with all the various rules of every sub, and they certainly coulent spend the time needed to see what rules need to be changed to shape the community to be something productive and valuable.
I've seen that number floated around and am also skeptical. But if it's accurate, Reddit should just... do it. Full control of their site of hundreds of millions of users for the payroll of a medium sized business? They'd be stupid not to.
And honestly, I wouldn't even be mad. Paying their mods would effectively pop the balloon of my moral outrage.
You want to deny your employees the tools they need to do their jobs? Fine, it's your productivity that will suffer, no one else's. You want to rule the site with an iron fist? At least you're not being huge hypocrites and pretending it's community-run.
The problem is that Reddit can't actually do that. Because the cost (as others have pointed out) would be way higher even at minimum wage. Reddit is completely reliant on free labour. It would have gone under a long time ago without it. Given the leadership's hostility towards the people that create the content and help maintain that content, Reddit going under is overdue and the platform is now past it's use by.