I think Google believes that it would not be able to maintain its competitive edge with lower quality, lower paid employees. Having worked there, I think they a

I think Google believes that it would not be able to maintain its competitive edge with lower quality, lower paid employees. Having worked there, I think they are right on that account. In fact it probably wouldn't even be able to function after a few years after people who don't know what they're doing totally screw up their monorepo and eng processes. But there's another function to high pay: sucking the oxygen out of the atmosphere. They basically hire a significant chunk of systems (and nowadays also AI) programmers available in the industry, and keep them for as long as they like. Left to their own devices, those programmers would be able to start companies, or help Google's competitors compete with Google. As things stand, everyone else (including the likes of Microsoft) gets the folks who have failed the FAANG interviews. They still sometimes get good people, but not as good as to show them the way from the corners they've painted themselves into. Where it all goes wrong though is when they actively attract "activists". From direct observation, few, if any, of those activists actually pull their weight once hired. In fact they often prevent others from focusing on their work, so their productivity contribution is often negative. They mostly spend their days on activism on the internal Google+ and do little else. You can actually see everyone's commits at Google, as well as graphs of how much code they contribute. When I was there, I'd check those dashboards from time to time only to confirm my suspicions, without fail.