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The author made a blind guess that 80% of Google would quit If they moved HQ without any actual evidence. If Google opened up a new large office in a place lik
by remote_phone 7y ago
The author made a blind guess that 80% of Google would quit If they moved HQ without any actual evidence.
If Google opened up a new large office in a place like Kansas City with no salary cut and a strong internet presence and some other tech companies (ICE exchange for example), I bet enough Google employees would want to move there to make it worthwhile. Cheaper cost of living, better schools, better for families etc. plus alternatives If you get tired of working at Google but probably not since your lifestyle would be so much better than the Bay Area.
I know a lot of people that are very sick of the Bay Area, especially those with kids.
- malandrew 7y agoWith no salary cuts would be amazing. So long as the policy is transparent for new hires in the new market, you would only need to grandfather people those that make the move. There are tons of places I’d move to easily if I could keep my current SF salary.
- WalterBright 7y agoSince your salary would go much further outside of SF, why would it be necessary to keep the same salary?
- tomnipotent 7y agoDoes Google make the same profit regardless? Yup, I think it's necessary.
- WalterBright 7y agoWhat does Google's profit have to do with your salary needs?
- unlinked_dll 7y agoAs Publilius Syrus put it, "everything is worth what it's purchaser will pay." Why should google be willing to pay less for continued labor after relocating if profits are unaffected? And if they're not, why would anyone keep working there?
- WalterBright 7y agoIf your money goes 2x further after the move, then you might be much better off even with a salary reduction. This means a move could be a win for both google and the employee. Also, pegging your salary to corporate profits has its downsides. At Boeing, a good chunk of the worker bees negotiated their bonuses to be pegged to the quarterly profits. They were pretty unhappy about this when the 737MAX problems tanked profits, and the bonuses vanished.
- unlinked_dll 7y agoI think profit sharing is totally awesome in all forms and losing bonuses when your business kills people is more than reasonable. But anyway to me the math isn't about win/win but just supply and demand. If they can afford to pay it and were willing to before, it's not like you can't make the same amount (if not more) and have better future prospects without the stress and cost of moving. I think a more realistic take would be a more decentralized approach to labor in general and allow many smaller satellites to pop up (which they already have) in many places and allow their people to move freely with minor salary adjustments. That way the costs and benefits even out in the long run, mass relocation to a single location probably isn't great for anyone involved long term.
- WalterBright 7y agoSupply & demand is exactly about win/win. People don't wittingly make deals where they are worse off than if they decline the deal.
- Zenbit_UX 7y ago> They were pretty unhappy about this when the 737MAX problems tanked profits, and the bonuses vanished. I have no doubt, likely more unhappy at lost bonuses than the fact they contributed directly to many lives being lost.
- ShamelessC 7y agoYeah I don't see the connection there either. I think an equivalent salary adjusted for cost of living with maybe an extra 10% to show good faith would be plenty. People with the 150k-300k salaries FAANG provides would be making a surgeon's salary in Kansas City.
- akerl_ 7y agoI feel like this thread is made of the kind of hard-line stances that lower the overall quality of HN. Both sides present a rhetorical question designed to paint the other side’s position as nonsensical, without engaging in any actual discussion. Google’s profit clearly has to do with salary because salary is a negotiation between employees and employers, and “my work allows you to make $x more dollars than if I hadn’t done the work” is a basic tenet of salary negotiation. But this is a negotiation. If Google moved to a lower cost-of-living location, they’d be making themselves available as an employer to new employees, for whom their current locations are undesirable. So if there are other potential employees who are willing to do the work for less salary, Google has the option to hire them instead.
- WalterBright 7y ago> But this is a negotiation. Sure. But negotiating for a piece of the action comes in the form of deciding on stock options and grants. Salaries don't go up and down with profits.
- reillyse 7y agoSalaries do go down with profits, a long enough run of low profits and salaries go to zero.
- asdfasgasdgasdg 7y ago> Salaries don't go up and down with profits. It objectively the case that salaries vary with profits. Are you just saying you think they ought not? If the company is losing money, you can bet raises will be harder to come by. When Facebook was poaching a lot of Googlers in the late aughts and early teens, base salaries went up a bunch to make the job more competitive. But if Google hadn't been profitable there would have been no headroom to make that change. Those are two (of many) ways that salaries vary with profits.
- WalterBright 7y ago> It objectively the case that salaries vary with profits. Salaries are a function of the perceived value of the particular employee to the company. If the salary is too low, he'll be poached by another company. If it's too high, he's likely to be laid off or otherwise pushed out. For example, if an employee contributes $100 in value to the company, his ideal compensation would be $100 minus the opportunity cost of the money, which is about $15. This has nothing to do with the profit of the company as a whole. It is true that companies often have a lot of difficulty computing what the actual dollar value of a particular employee is, but there is no doubt that the company will do badly if it gets it too far wrong too many times. Companies falling on hard times that try to cut salaries across the board (or limit raises, same thing) do so at great peril - the underpaid (relative to their contribution) employees leave and the overpaid stay. I.e. this can result in a vicious death spiral. A much harder, but far more effective strategy is to identify the overpaid ones and get rid of them.
- scarejunba 7y agoNeither the salary needs nor the profit margins really influence Google salaries. Employees are paid salaries based on the margin at the market.
- claudeganon 7y agoThis should explain it: https://en.m.wikipedia.org/wiki/Labor_theory_of_value https://en.m.wikipedia.org/wiki/Labor_theory_of_value
- tomnipotent 7y agoWhy does where I love have to do with my salary? Google makes the same profit off me regardless, so I want my share.
- imtringued 7y agoBecause companies will reduce the salary until the net benefit is 0. You still want a small nudge/incentive to encourage people to move.
- hellisothers 7y agoIn discussing this with others I’ve found the same sentiment about moving if they can keep the same salary. But then I ask do they expect the inevitable next job after the current one to also offer the same salary? Unlikely. There are tons of great reasons to leave CA for jobs elsewhere, money shouldn’t be the reason.
- duxup 7y agoWould be great for Googlers ... kinda horrible for locals in KC who would still be making the same amount, and housing costs skyrocket.... funding sudden needed school expansions ... and so on... The economic and political messes of sudden expansion can be an absolute mess.
- bobajeff 7y agoAs someone who has experienced this happen to my home city I can vouch. It does suck.
- sien 7y agoWhich city?
- grawprog 7y agoNot the parent but Vancouver's become like that over the last 10 years or so. I lived just outside Vancouver and I watched the relatively quiet, affordable neighbourhood I lived in suddenly become filled with overpriced highrises and condos and watched rent more than double in price while average wages remained relatively stagnant.
- mrr54 7y agoYeah that's nothing to do with big companies moving there. That's what happens when you let Chinese investors dominate your housing market. (See Auckland as well)
- fredophile 7y agoI left Vancouver almost 10 years ago. Rents were okay at the time but housing prices were already ridiculous and had been for a long time. I'm not surprised that rents moved up to be more in line with the cost of ownership.
- remote_phone 7y agoI am from Vancouver. The house prices have always been ridiculous since the early 80s when my family moved there. Vancouver’s real estate market has always been unaffordable and the highest in Canada. This is nothing new in the last 10 years, it’s literally a 40 year old problem.
- 3fe9a03ccd14ca5 7y ago> no salary cut Unlikely. A lot of the reason the pay here is so good is because of the high cost of living.
- lvturner 7y agoHasn't this been proven false by googlers living in other high cost cities yet earning significantly less than those in SF?
- filmgirlcw 7y agoYes. And if a Googler (and this is true if most others major tech companies too) transfers from SF or NYC to another market, their salary usually drops. In fairness, the drop isn’t 50% or anything like that. And levels (which define the bonus structure) are still the same. If a large company was doing a mass-migration of employees to a new, lower-cost city, it might make sense to keep salaries consistent. But let’s not kid ourselves and think that new hires at that new location would still be hired at the SF rate. And as others have pointed out, if the salary did remain that high and you left, it’s almost guaranteed that your next job would not have that kind of salary. Personal anecdote: when I moved from NYC to Seattle, I didn’t take a pay cut (I was switching industries), but the recruiter knew my Seattle market-rate was lower than my NYC market-rate. She tried to console me with promises of lower-cost of living (in fact, I pay more in rent now, but in fairness my equivalent apartment in Seattle would be 25% higher in NYC) — which wasn’t really true. But the tax difference was/is so massive, that it really does offset the salary difference, even at market rate. And if I were to transfer from Seattle to NYC, I would insist on getting a pay increase to offset those higher costs. I don’t like employers lowering salaries if an employee moves to another lower-cost city (mostly because in many cases they are already paying hire taxes in those expensive markets and it feels punitive to get to pay less taxes and a lower salary for the same work/person), but it’s very common. That said, I don’t think it’s possible for very large companies to follow the Basecamp approach of universal salary structure based on being in the top X% of SF median or mean salaries (I forget which). As nice as that is for a smaller company, if you’ve got 100,000 employees (not counting contractors) potentially paying people 4x market rate doesn’t make sense and it doesn’t scale. That said, there are always exceptions. If a person is valuable enough to the business, that person can get whatever salary they want regardless of location.
- usaar333 7y agoThe more interesting question might be what percent of senior employees would quit Google if ordered to move. I have no direct evidence, but my sense is potentially much higher than the average: they could care less about living costs, don't want to uproot their families, love CA weather, love living in such a tech heavy area, have access to better schools than in Kansas, etc. FWIW, my old company added a Seattle office a few years ago. Sure, some people moved, but it was pretty negligible.
- _jasper 7y agoI think there's a real possibility that the new Google employees and their kids would "make" the schools in their Kansas town better, through a bunch of different mechanisms. I live in an excellent school district in the rural middle of nowhere, and it's 100% because of the large state university that happens to be here.
- desas 7y agoIn the long term for sure, but for individual families considering to relocate they're looking at the short term. How long does it take to "make" the schools better, and how many of the ten or so years your child is in education before the level gets back to what they already have.
- brownbat 7y agoKansas City already has a mix of great and terrible schools, like every metro area, segregated mostly by the cost of living in that particular district. They'd probably just move to the wealthier suburbs or send kids to high quality private schools. Longer term, having a solution for schools that doesn't create such radical disparities between districts mere miles apart would be in everyone's interest, but that's a broader national problem.
- munificent 7y agoIn fact, Google has a Pittsburgh office which is doing quite well as far as I can tell.
- dredmorbius 7y agoThere are issues: https://news.ycombinator.com/item?id=21997412 https://news.ycombinator.com/item?id=21997412
- Spoom 7y agoFWIW as a Pittsburgh Googler, I haven't experienced the air issues personally. That said, I don't live near the office. It seems like the issues are a lot more obvious to those who live near Bakery Square.
- Spoom 7y agoThe fact that that office exists was a major reason I was able to consider them as an employer. I'd already looked at SF / NYC as options and basically priced myself out because I'd be moving with my family, and I wanted a house / decent commute / to not have roommates. (Admittedly, when I was looking at SF / Silicon Valley before, I was looking at startups; having a Big N as an employer might have just made it work, but we'd still have been losing out on closer family ties.)
- munificent 7y agoGoogle actually has good-sized, growing offices in a number of major US cities these days. SF and NYC are huge, but there are plenty of other options: Seattle, Boulder, Austin, Pittsburgh, LA, Irvine, Chicago, Ann Arbor, Cambridge, etc. I also have a family and have no interest in ever living in Silicon Valley or New York. I'm at Google and absolutely love being in Seattle.
- adaisadais 7y agoAny of your young and single googlers would probably decide to stay. California (in my experience) is a much more attractive place for 20-30 something’s than KC. They could most likely get a job with one of the many tech companies in the Bay.
- dodobirdlord 7y agoAs a counterpoint, in the leadup and when Amazon announced their HQ2 in Northern Virginia, one thing they were very clear about is that no teams and no employees except some execs were going to actually get reassigned to the new location. All staffing at the new location would be via new hires at the new location. They knew full well that if they tried to move a team, most of the members of the team would transfer to a team that wasn't relocating, and that if they tried to prevent that the employees would just quit.
- humanrebar 7y ago> They knew full well... How? Short of some background, this could easily be a massive assumption.
- notimetorelax 7y agoI have seen multiple teams move location within one corporation. Most of the time no one moves.
- ckrailo 7y agoCounter-counterpoint, Toyota consolidated several offices in CA/KY/NY to one HQ to Plano, TX and brought about 2800 out of 4000 employees. It was a big disrupter to local housing prices, with massive swaths of land experiencing the maximum-by-law 10%-yearly property tax increases. (Source: https://www.dallasnews.com/business/local-companies/2018/07/31/after-toyota-moved-2800-workers-from-around-the-u-s-to-plano-how-is-texas-working-out/ https://www.dallasnews.com/business/local-companies/2018/07/...) I don't know if there's any easy generalizations to suss out. Probably every case will be very specific to the work being done, the environment it's done in, and the people it's done by.
- bobbiechen 7y agoRelevant story from Peopleware (Tom DeMarco and Tim Lister): One thing Townsend seems to have missed entirely is the presence of women in the workforce. The typical person being moved today is part of a two-career family. The other half of that equation is probably not being moved, so the corporate move comes down hard on the couple’s relationship at a very delicate point. It brings intolerable stress to bear on the accommodation they’re both striving to achieve to allow two full-fledged careers. That’s hitting below the belt. Modern couples won’t put up with it and they won’t forgive it. The company move might have been possible in the 1950s and 1960s. Today it is folly. Even in the sixties, organizational moves didn’t make much sense. A case in point is the decision by AT&T’s Bell Laboratories to move the 600-person ESS project from New Jersey to Illinois in 1966. [...] Years after the ESS cutover, I arranged to interview Ray Ketehledge, who had run the project. I was writing some essays on management of large efforts, and ESS certainly qualified. I asked him what he saw as his main successes and failures as boss. "Forget the successes," he said. “The failure was that move. You can't believe what it cost us in turnover." He went on to give some figures. The immediately calculable cost of the move was the number of people who quit before relocation day. Expressed as a percentage of those moved, this initial turnover was greater than the French losses in the trenches of World War I. [...] And that accounts only for the initial loss. In the case of Bell Labs, there was another large exodus starting about a year after the move. These were the people who had honestly tried to go along with the company. They moved and, when they didn’t like the new location, they moved again.
- brailsafe 7y agoWhy would your lifestyle be better in KC than SF? With kids I'd expect it to be more manageable in terms of costs, but while I like KC, I struggle to see how it would be better
- humanrebar 7y agoHousing isn't a struggle. Because of that, commuting and good schooling aren't as big of struggles. Hobbies and outside-work activities are generally easier to support for similar reasons.
- jefftk 7y ago(author) I'm curious what your guess is? I'm not talking about opening a new satellite office in a cheaper area (they've already done this, for example Pittsburg) but actually moving their headquarters. Tens of thousands of roles moving from Mountain View / Sunnyvale to Kansas City. Most of these roles are occupied by people who have a lot of options and don't want to move across the country. Even if they were up for moving and the company was offering to keep the same (far above market for KC) pay, they'd be very nervous about entering a situation where their employer would have so much more leverage over them.
- pitt1980 7y agoI’m not sure either (My totally blind guess would be about half of your guess, which would be plenty high enough for your point to still stand) That said, corporate headquarters get moved frequently enough that this is probably a question that Google could and would model out were such a move actually under consideration.