13 ms·

Google staff squirm as remote workers face pay cuts

77 points by blopeur 5y ago

JoeAltmaier 5y ago
Get real. Arguments about CoL or geography or stock are all smokescreen. They pay for Engineers is whatever the market will bear. It's quite curious that Engineers accustomed to calculating efficiency and tradeoffs will get mired in imaginary discussions about 'correct' hiring. If arguments about CoL or geography or nationalism quite being persuasive to potential hires, the hiring organization will simply switch to some other arguments. It's just business.
senectus1 5y ago
I dont understand how this makes any sense. Seems mean and greedy to me. I use MY resources, My power/internet/aircon/floor space to do a job for my employer. Why should I be paying for that?
jleyank 5y ago
In my career, cutting salary without just cause was viewed as a request to change employment. Or, a signal that the company was in dire straits and extreme cash management was required. I think we can assume google does not fall into the latter category. And cutting salary when it will improve retention and hiring “reach” and enable the company to better manage real estate costs strongly suggests it’s a stealth layoff, aiming to remove any peg developing a bit of square-ness. Round pegs fit the holes best, eh? And remember, having the worker exit on their choice costs the company nothing.
- meowtimemania 5y ago
  80% of my Bay Area salary is significantly higher than the local payment for my area. I’m just hoping these inflated salaries last. I’m nervous to buy a home because even if I make $$$ now, if I ever get fired and need to find a local job I won’t be able to meet my previous salary.
  - ithkuil 5y ago
    That worry would technically still apply if you could move while keeping 100% of the salary as a remote worker, right?
    - jleyank 5y ago
      Trust me. Buying a house when you can't easily change jobs is a risk - in down times, a forced move might/will lose you some money as the market will weaken if there's layoffs, etc. Remote work is a great help towards (significantly?) reducing this problem.
      - ithkuil 5y ago
        My point is that this is true regardless if the pay is cut a bit. If you work for Google and move to work remotely, you may need to worry that when you need to change jobs you may not find some other SV giant hiring you remotely with the same conditions.
  - paxys 5y ago
    This isn't a Bay Area problem but rather applies everywhere in the world. The risk adverse solution is to save for a home rather than take on a large mortgage.
    - antisthenes 5y ago
      No, the risk adverse solution is to live below your means while paying the mortgage, so that you have money left over if you ever have to take a pay cut.
    - pc86 5y ago
      Even in MCOL areas with an average-to-high non-FAANG tech salary, "just save 250-500k for a house" is not realistic advice. Even with a FAANG salary that's doable with concerted effort but not if you already have a family.
      - 5y ago
- likpok 5y ago
  All these companies had roughly these policies before Covid: move to the cheaper office, get paid slightly less. It doesn’t impact tech people because the tech offices were always the bay, Seattle and nyc which often ended up in the same band.
tmysl 5y ago
Why does google (or any company for that matter) think this is a good idea? Especially with jobs in the tech industry being so abundant and people chomping at the bit to hire SWEs/SREs.
- convolvatron 5y ago
  Maybe they are finally getting a little financial pressure?
- HenryKissinger 5y ago
  By adjusting pay to local cost of living Google is effectively saying that they will provide their employees with the same standard of living regardless of their location. In lower cost of living areas this means an accordingly lower salary, because a Bay Area salary would otherwise afford an employee a better standard of living. As for losing talent, Google is sufficiently established that the majority of freshly minted computer science and software engineering graduates are still desperate to work for Google if they can get in. And Google doesn't need to hire all the top talent to grow or run with the same profit margins. I suspect software engineering salaries for new hires will start declining in nominal terms within the next decade or so, as (1) automation lowers demand for engineers on the business side (2) the labor supply keeps growing (3) non engineers in tech companies demand adjustments to their own pay to match engineers or start leaving for other companies that do, leaving less money to pay engineers (4) MBAs keep moving into management and start cutting labor costs for their most expensive individual contributors to increase profits and satisfy shareholders. When new graduates make as much as doctors, with only a fraction of the education, while every other profession, with the exception of junior investment bankers, including technical ones and non-software engineering professions, are lucky to crack $75k, I don't see how the current job market is sustainable.
  - 908B64B197 5y ago
    > By adjusting pay to local cost of living Google is effectively saying that they will provide their employees with the same standard of living regardless of their location. In lower cost of living areas this means an accordingly lower salary, because a Bay Area salary would otherwise afford an employee a better standard of living. Except you are now stuck and can't transition back to a HCol area because all these years you were building less equity. A 1M house in the Bay Area sells for 1M. A 300K house in Anywhere sells for... you guesses it, 300K.
allcentury 5y ago
It took me a long time to realize that these weren't CoL adjustments. Companies want to be competitive in your local market so they can retain you and so they can "hire the best". Where this gets murky is now everyone is remote so is there really a local market?
- lancesells 5y ago
  I would guess in most cases whatever value the employees provided Google has not changed. Not only that, Google's costs are lower not having to provide a space for their workers. Trillion dollar companies with their record quarterly profits cutting their employees pay is nonsense.
  - yao420 5y ago
    Exactly these companies are ultra rich and can afford to pay for talent. Google has $160 billion in cash. Im NYC, Google just spent $2.1 billion on a Hudson yards building, in addition to the $2.4 billion for the Chelsea market and $600 million for the milk building across the street two years ago. They have the money, they just might not want to lose their real estate investments value.
  - hellisothers 5y ago
    Is it though? How is lowering an existing employee’s pay who moved away different than laying them off and hiring what you perceive as the exact same skill level of employee in this remote location at a lower pay? Ignoring the whole “well my company already knows I’m a great fit and hiring somebody new is a risk” argument as that is an issue with hiring & firing generally.
    - fileeditview 5y ago
      It's different because it may not be so easy to find an "equal" replacement. And they could pretty easily get into that situation. If enough developers quit after such a pay cut and find work at other employers that don't play this game then Google may have some trouble. And then you have to ask: "was this worth it?". And my guess would be no.
Jyaif 5y ago
"What is it about my work that is somehow less valuable in a different location?" That person is either incredibly naive or dishonest. If she's naive, she should start by asking herself why is she paid multiple times what someone doing the same job in Hyderabad is.
- foepys 5y ago
  All this outsourcing talk is so 2005. If it worked so easily, FAANG would've outsourced everything to India 10 years ago and tripled their profit. In reality a common cultural background (i.e. how to approach some kind of work) is a lot more important than a lot of managers want you to believe. Outsourcing also requires extensive planning and management, which increases the number of managers required and thus increases the costs of outsourcing. E.g. VW tried outsourcing over the last 10 years and is now recruiting developers en masse in Germany because it failed to make it work.
  - pjmlp 5y ago
    Given how much companies like CapGemini, TCS and Infosys grew in Germany during the last 15 years, I bet VW still has plenty of business units going at it.
    - thrower123 5y ago
      I have never talked to anybody who used those outfits that were happy about the results. It must be an incredible cost savings.
      - pjmlp 5y ago
        When problems in such projects escalate they are sorted out during business lunches or golf matches. What the crews on the machine room think about the deal hardly matters.
  - unmole 5y ago
    > All this outsourcing talk is so 2005. Except for the fact that it's not outsourcing to the lowest bidder like companies tried back then. Pretty much every major American tech company has a development center in India. The developers working here are employees of the parent company. They have the same or functionally similar culture as the HQ. And the cost advantage has significantly shrunk because of the booming local startup scene.
tomohawk 5y ago
If the company was willing to pay me $X for the work I'm doing, then they should continue to pay me at least $X if I change locations. The work has already been valued. Does the company exist to support the HR department, or does the HR department exist to support the company and employees? At google, we know the answer.
- rightbyte 5y ago
  I wonder what operators at like the Hover Dam makes an hour. Surely they get payed by the value producing those 2GW? You essentially get payed to afford housing in the area where you work, not by value.
  - 8note 5y ago
    No you don't, or Vancouver would have very well paid software jobs. You're paid about the same as other jobs you could get. The drop in salary is a loss of leverage you have over the company
deleted 5y ago
[deleted]
madengr 5y ago
I’m surprised the whole 100% remote has not pushed all the jobs to India. I think it’s coming. If you can work 100% remote, your job is ripe for outsourcing to a low wage country.
TheRealDunkirk 5y ago
Google made $19B profit on $65B revenue last year. Whatever this is, it is NOT about being able to continue paying their workers what they already make.
GhostVII 5y ago
People making hundreds of thousands of dollars complain because they don't get to keep their insane salaries when moving to less competitive areas.
- DoingIsLearning 5y ago
  Would you feel as strongly about this if it was a corporation, instead of a single individual? If I as corporation buy from a third party OEM and they decide to move production from Texas to Malaysia or Vietnam, would you also feel strongly that I as customer am entitled to a discount? Or would you consider that we have agreed to a contract where the supplier is delivering the same OEM product but now from a different location?
  - GhostVII 5y ago
    If a supplier changes locations I would definitely expect prices to change in future contracts. Of course the current contract shouldn't be changed if we had already agreed on a price for some number of units.
  - rsj_hn 5y ago
    The OEM is selling a tradable, so you would expect companies to already search the world for the cheapest version and be buying that, as there is effectively a single global market. Labor, historically, has not been so mobile. There is not a single market for labor, there are many different markets. And in each market, the company pays the prevailing market wage. For that reason, when someone moves from market A to market B, their wages are adjusted up or down based on the cost of labor in those markets.
  - 8note 5y ago
    I would, yeah. Chances are that the product has changed, same as the now-remote engineer's product
  - Jensson 5y ago
    People pay more for products made in USA than products made in China, even if it is the same product, yes.
nojito 5y ago
This is a great way to finally lower the massive engineering bloat that plagues FAANG.
hello_moto 5y ago
A lot of the discussions here never mentioned one issue that might arise if the companies didn't adjust for CoLiving: What would happened to the existing employees of the same company that already accepted lower salary for being in LCOL? Google Mountain View pays differently than other Google branches (heck for a while, the pay in Google Seattle was slightly lower compare to HQ). Now you have Google Señor Developer in LCOL accepted the fact that they get paid less than their compadre in Mtn View, but your Mtn View compadre decided to be your neighbour while refusing your level of pay. Wouldn't that create tension?
- throwawaysea 5y ago
  Such issues already exist. When the company adjusts pay scales they don’t go proactively bring everyone up to their “true” deserved pay. They might make some minor adjustment but are otherwise happy to let compensation linger above some defensible minimum and pocket the difference.
  - joshuamorton 5y ago
    FWIW from the data I've seen (at Google) this isn't really the case. When the guideline for a location increases, salaries are set to the new guideline * whatever the prior performance/tenure/whatever multiplier on top of that guideline was. This is also the case when you transfer to a more expensive location. (A well-tenured senior engineer who transfers from Bangalore to Mountain View won't be set to the minimum salary for L5, but something higher)
- plafl 5y ago
  Was "Señor Developer" intentional or an auto correction of some spanish keyboard? Anyway I love it and I'm thinking of keeping it for myself.
  - djmips 5y ago
    Old obvious but funny pun. Please enjoy!
lazyant 5y ago
While I sympathize with the principle that two people providing the same value should be paid the same, in these discussions it seems to me almost everybody is forgetting we live in a capitalist world and the offer and demand law applies. If a company can get the same or better quality of engineers in a lower cost of living area at a cost discount (example: Canada where salaries were about half than in SV and about 50% less than say Midwest US), why are they going to not take the discount? And this "arbitrage" is what it seems to be happening, with US companies hiring fully remote Canadians at 25% discount for them and still the Canadians making 25% more than they used to. (Obv this doesn't address existing employees who moved to LCOL)
demeyer1 5y ago
In an aggressive hiring market for engineers, this is a decision Google is making which will increase potential churn risk for some engineers. As a Xoogler myself, I know how much they invest into thinking about talent acquisition and retention and would venture to say they are aware of this. I suspect none of this is as "hot take" to them. At the same time, Google's stock is up massively over the last two years. Google has been relatively aggressive with RSU allocations. That appreciation in RSU value will act as an offset for a subset of those who would churn. This must also factor into their current policy decisions. The team's at Google try very hard to optimize for retaining their best people, but they are dealing with very large numbers of individuals during an unusual time. Further, they have traditionally been leading the charge for geographic proximity and density for product teams. Lots of change for them to manage through right now. That said, as a CTO at a startup (which counts Google Ventures as an investor) I have hired many engineers from Google over the past 18mo. Approximately half our engineers are ex Google, Amazon, Microsoft. Beyond our product and ENG culture, our policy is fully distributed work (within the US - compliance reasons) and that is the one benefit ex FAANG engineers seem to value the most, currently (small N, selection biases acknowledged). Over all roles, I would estimate more than half the company consists of ex FAANG employees. Many were tired of being locked into a geography which did not make them happy. So I view this as a change in the market dynamics which is allowing startups like mine to help make these engineers happier. We have engineers that have joined, and immediately moved to Hawaii, or purchased a rural farm in the Midwest - and we are 100% supportive of them having a work/life that makes them happiest. Also, we've removed policies of paying differently based on the traditional tier 1, 2, and 3 geographies. This is a market advantage that favors engineers, and as such - I'm very supportive :)
- chris11 5y ago
  > Many were tired of being locked into a geography which did not make them happy. Do you compete with Bay area FAANG salaries? It seems that part of the reason companies pay so much in Silicon Valley is because the cost of local labor is so high.
  - demeyer1 5y ago
    We do. It works for us because we are aggressive on salary (for a startup at our stage) and very aggressive with benefits and flexibility.
aYsY4dDQ2NrcNzA 5y ago
Pre-pandemic real-world scenarios at my employer: 1. Employee switches to 100% at home situation, same team, same role. But they remain in the employer’s town, they don’t move away. 2. Same as scenario #1, but they move away to somewhere with a cheaper cost of living. #1 suffers no pay reduction, but #2 does.
mensetmanusman 5y ago
Companies exist to inflate real estate prices, so they must pay based on local costs! /s
LAC-Tech 5y ago
A lot of people seem to be under the assumption that this is based on "cost of living'. Where I live has a higher CoL than almost all of the US, and local salaries are a fraction. It's about google paying competitively compared to local companies. Nothing to do with cost of living.
theonlybutlet 5y ago
An opportunistic smash and grab, they've found some leverage they can use to their advantage. It'd be fair if the workforce were unionised.

77 points by blopeur 5y ago

Get real. Arguments about CoL or geography or stock are all smokescreen. They pay for Engineers is whatever the market will bear. It's quite curious that Engineers accustomed to calculating efficiency and tradeoffs will get mired in imaginary discussions about 'correct' hiring. If arguments about CoL or geography or nationalism quite being persuasive to potential hires, the hiring organization will simply switch to some other arguments. It's just business.

senectus1 5y ago

I dont understand how this makes any sense. Seems mean and greedy to me. I use MY resources, My power/internet/aircon/floor space to do a job for my employer. Why should I be paying for that?

jleyank 5y ago

In my career, cutting salary without just cause was viewed as a request to change employment. Or, a signal that the company was in dire straits and extreme cash management was required. I think we can assume google does not fall into the latter category. And cutting salary when it will improve retention and hiring “reach” and enable the company to better manage real estate costs strongly suggests it’s a stealth layoff, aiming to remove any peg developing a bit of square-ness. Round pegs fit the holes best, eh? And remember, having the worker exit on their choice costs the company nothing.

meowtimemania 5y ago
80% of my Bay Area salary is significantly higher than the local payment for my area. I’m just hoping these inflated salaries last. I’m nervous to buy a home because even if I make $$$ now, if I ever get fired and need to find a local job I won’t be able to meet my previous salary.
- ithkuil 5y ago
  That worry would technically still apply if you could move while keeping 100% of the salary as a remote worker, right?
  - jleyank 5y ago
    Trust me. Buying a house when you can't easily change jobs is a risk - in down times, a forced move might/will lose you some money as the market will weaken if there's layoffs, etc. Remote work is a great help towards (significantly?) reducing this problem.
    - ithkuil 5y ago
      My point is that this is true regardless if the pay is cut a bit. If you work for Google and move to work remotely, you may need to worry that when you need to change jobs you may not find some other SV giant hiring you remotely with the same conditions.
- paxys 5y ago
  This isn't a Bay Area problem but rather applies everywhere in the world. The risk adverse solution is to save for a home rather than take on a large mortgage.
  - antisthenes 5y ago
    No, the risk adverse solution is to live below your means while paying the mortgage, so that you have money left over if you ever have to take a pay cut.
  - pc86 5y ago
    Even in MCOL areas with an average-to-high non-FAANG tech salary, "just save 250-500k for a house" is not realistic advice. Even with a FAANG salary that's doable with concerted effort but not if you already have a family.
    - 5y ago
likpok 5y ago
All these companies had roughly these policies before Covid: move to the cheaper office, get paid slightly less. It doesn’t impact tech people because the tech offices were always the bay, Seattle and nyc which often ended up in the same band.

tmysl 5y ago

Why does google (or any company for that matter) think this is a good idea? Especially with jobs in the tech industry being so abundant and people chomping at the bit to hire SWEs/SREs.

convolvatron 5y ago
Maybe they are finally getting a little financial pressure?
HenryKissinger 5y ago
By adjusting pay to local cost of living Google is effectively saying that they will provide their employees with the same standard of living regardless of their location. In lower cost of living areas this means an accordingly lower salary, because a Bay Area salary would otherwise afford an employee a better standard of living. As for losing talent, Google is sufficiently established that the majority of freshly minted computer science and software engineering graduates are still desperate to work for Google if they can get in. And Google doesn't need to hire all the top talent to grow or run with the same profit margins. I suspect software engineering salaries for new hires will start declining in nominal terms within the next decade or so, as (1) automation lowers demand for engineers on the business side (2) the labor supply keeps growing (3) non engineers in tech companies demand adjustments to their own pay to match engineers or start leaving for other companies that do, leaving less money to pay engineers (4) MBAs keep moving into management and start cutting labor costs for their most expensive individual contributors to increase profits and satisfy shareholders. When new graduates make as much as doctors, with only a fraction of the education, while every other profession, with the exception of junior investment bankers, including technical ones and non-software engineering professions, are lucky to crack $75k, I don't see how the current job market is sustainable.
- 908B64B197 5y ago
  > By adjusting pay to local cost of living Google is effectively saying that they will provide their employees with the same standard of living regardless of their location. In lower cost of living areas this means an accordingly lower salary, because a Bay Area salary would otherwise afford an employee a better standard of living. Except you are now stuck and can't transition back to a HCol area because all these years you were building less equity. A 1M house in the Bay Area sells for 1M. A 300K house in Anywhere sells for... you guesses it, 300K.

allcentury 5y ago

It took me a long time to realize that these weren't CoL adjustments. Companies want to be competitive in your local market so they can retain you and so they can "hire the best". Where this gets murky is now everyone is remote so is there really a local market?

lancesells 5y ago
I would guess in most cases whatever value the employees provided Google has not changed. Not only that, Google's costs are lower not having to provide a space for their workers. Trillion dollar companies with their record quarterly profits cutting their employees pay is nonsense.
- yao420 5y ago
  Exactly these companies are ultra rich and can afford to pay for talent. Google has $160 billion in cash. Im NYC, Google just spent $2.1 billion on a Hudson yards building, in addition to the $2.4 billion for the Chelsea market and $600 million for the milk building across the street two years ago. They have the money, they just might not want to lose their real estate investments value.
- hellisothers 5y ago
  Is it though? How is lowering an existing employee’s pay who moved away different than laying them off and hiring what you perceive as the exact same skill level of employee in this remote location at a lower pay? Ignoring the whole “well my company already knows I’m a great fit and hiring somebody new is a risk” argument as that is an issue with hiring & firing generally.
  - fileeditview 5y ago
    It's different because it may not be so easy to find an "equal" replacement. And they could pretty easily get into that situation. If enough developers quit after such a pay cut and find work at other employers that don't play this game then Google may have some trouble. And then you have to ask: "was this worth it?". And my guess would be no.

Jyaif 5y ago

"What is it about my work that is somehow less valuable in a different location?" That person is either incredibly naive or dishonest. If she's naive, she should start by asking herself why is she paid multiple times what someone doing the same job in Hyderabad is.

foepys 5y ago
All this outsourcing talk is so 2005. If it worked so easily, FAANG would've outsourced everything to India 10 years ago and tripled their profit. In reality a common cultural background (i.e. how to approach some kind of work) is a lot more important than a lot of managers want you to believe. Outsourcing also requires extensive planning and management, which increases the number of managers required and thus increases the costs of outsourcing. E.g. VW tried outsourcing over the last 10 years and is now recruiting developers en masse in Germany because it failed to make it work.
- pjmlp 5y ago
  Given how much companies like CapGemini, TCS and Infosys grew in Germany during the last 15 years, I bet VW still has plenty of business units going at it.
  - thrower123 5y ago
    I have never talked to anybody who used those outfits that were happy about the results. It must be an incredible cost savings.
    - pjmlp 5y ago
      When problems in such projects escalate they are sorted out during business lunches or golf matches. What the crews on the machine room think about the deal hardly matters.
- unmole 5y ago
  > All this outsourcing talk is so 2005. Except for the fact that it's not outsourcing to the lowest bidder like companies tried back then. Pretty much every major American tech company has a development center in India. The developers working here are employees of the parent company. They have the same or functionally similar culture as the HQ. And the cost advantage has significantly shrunk because of the booming local startup scene.

tomohawk 5y ago

If the company was willing to pay me $X for the work I'm doing, then they should continue to pay me at least $X if I change locations. The work has already been valued. Does the company exist to support the HR department, or does the HR department exist to support the company and employees? At google, we know the answer.

rightbyte 5y ago
I wonder what operators at like the Hover Dam makes an hour. Surely they get payed by the value producing those 2GW? You essentially get payed to afford housing in the area where you work, not by value.
- 8note 5y ago
  No you don't, or Vancouver would have very well paid software jobs. You're paid about the same as other jobs you could get. The drop in salary is a loss of leverage you have over the company

deleted 5y ago

[deleted]

madengr 5y ago

I’m surprised the whole 100% remote has not pushed all the jobs to India. I think it’s coming. If you can work 100% remote, your job is ripe for outsourcing to a low wage country.

TheRealDunkirk 5y ago

Google made $19B profit on $65B revenue last year. Whatever this is, it is NOT about being able to continue paying their workers what they already make.

GhostVII 5y ago

People making hundreds of thousands of dollars complain because they don't get to keep their insane salaries when moving to less competitive areas.

DoingIsLearning 5y ago
Would you feel as strongly about this if it was a corporation, instead of a single individual? If I as corporation buy from a third party OEM and they decide to move production from Texas to Malaysia or Vietnam, would you also feel strongly that I as customer am entitled to a discount? Or would you consider that we have agreed to a contract where the supplier is delivering the same OEM product but now from a different location?
- GhostVII 5y ago
  If a supplier changes locations I would definitely expect prices to change in future contracts. Of course the current contract shouldn't be changed if we had already agreed on a price for some number of units.
- rsj_hn 5y ago
  The OEM is selling a tradable, so you would expect companies to already search the world for the cheapest version and be buying that, as there is effectively a single global market. Labor, historically, has not been so mobile. There is not a single market for labor, there are many different markets. And in each market, the company pays the prevailing market wage. For that reason, when someone moves from market A to market B, their wages are adjusted up or down based on the cost of labor in those markets.
- 8note 5y ago
  I would, yeah. Chances are that the product has changed, same as the now-remote engineer's product
- Jensson 5y ago
  People pay more for products made in USA than products made in China, even if it is the same product, yes.

nojito 5y ago

This is a great way to finally lower the massive engineering bloat that plagues FAANG.

hello_moto 5y ago

A lot of the discussions here never mentioned one issue that might arise if the companies didn't adjust for CoLiving: What would happened to the existing employees of the same company that already accepted lower salary for being in LCOL? Google Mountain View pays differently than other Google branches (heck for a while, the pay in Google Seattle was slightly lower compare to HQ). Now you have Google Señor Developer in LCOL accepted the fact that they get paid less than their compadre in Mtn View, but your Mtn View compadre decided to be your neighbour while refusing your level of pay. Wouldn't that create tension?

throwawaysea 5y ago
Such issues already exist. When the company adjusts pay scales they don’t go proactively bring everyone up to their “true” deserved pay. They might make some minor adjustment but are otherwise happy to let compensation linger above some defensible minimum and pocket the difference.
- joshuamorton 5y ago
  FWIW from the data I've seen (at Google) this isn't really the case. When the guideline for a location increases, salaries are set to the new guideline * whatever the prior performance/tenure/whatever multiplier on top of that guideline was. This is also the case when you transfer to a more expensive location. (A well-tenured senior engineer who transfers from Bangalore to Mountain View won't be set to the minimum salary for L5, but something higher)
plafl 5y ago
Was "Señor Developer" intentional or an auto correction of some spanish keyboard? Anyway I love it and I'm thinking of keeping it for myself.
- djmips 5y ago
  Old obvious but funny pun. Please enjoy!

lazyant 5y ago

While I sympathize with the principle that two people providing the same value should be paid the same, in these discussions it seems to me almost everybody is forgetting we live in a capitalist world and the offer and demand law applies. If a company can get the same or better quality of engineers in a lower cost of living area at a cost discount (example: Canada where salaries were about half than in SV and about 50% less than say Midwest US), why are they going to not take the discount? And this "arbitrage" is what it seems to be happening, with US companies hiring fully remote Canadians at 25% discount for them and still the Canadians making 25% more than they used to. (Obv this doesn't address existing employees who moved to LCOL)

demeyer1 5y ago

In an aggressive hiring market for engineers, this is a decision Google is making which will increase potential churn risk for some engineers. As a Xoogler myself, I know how much they invest into thinking about talent acquisition and retention and would venture to say they are aware of this. I suspect none of this is as "hot take" to them. At the same time, Google's stock is up massively over the last two years. Google has been relatively aggressive with RSU allocations. That appreciation in RSU value will act as an offset for a subset of those who would churn. This must also factor into their current policy decisions. The team's at Google try very hard to optimize for retaining their best people, but they are dealing with very large numbers of individuals during an unusual time. Further, they have traditionally been leading the charge for geographic proximity and density for product teams. Lots of change for them to manage through right now. That said, as a CTO at a startup (which counts Google Ventures as an investor) I have hired many engineers from Google over the past 18mo. Approximately half our engineers are ex Google, Amazon, Microsoft. Beyond our product and ENG culture, our policy is fully distributed work (within the US - compliance reasons) and that is the one benefit ex FAANG engineers seem to value the most, currently (small N, selection biases acknowledged). Over all roles, I would estimate more than half the company consists of ex FAANG employees. Many were tired of being locked into a geography which did not make them happy. So I view this as a change in the market dynamics which is allowing startups like mine to help make these engineers happier. We have engineers that have joined, and immediately moved to Hawaii, or purchased a rural farm in the Midwest - and we are 100% supportive of them having a work/life that makes them happiest. Also, we've removed policies of paying differently based on the traditional tier 1, 2, and 3 geographies. This is a market advantage that favors engineers, and as such - I'm very supportive :)

chris11 5y ago
> Many were tired of being locked into a geography which did not make them happy. Do you compete with Bay area FAANG salaries? It seems that part of the reason companies pay so much in Silicon Valley is because the cost of local labor is so high.
- demeyer1 5y ago
  We do. It works for us because we are aggressive on salary (for a startup at our stage) and very aggressive with benefits and flexibility.

aYsY4dDQ2NrcNzA 5y ago

Pre-pandemic real-world scenarios at my employer: 1. Employee switches to 100% at home situation, same team, same role. But they remain in the employer’s town, they don’t move away. 2. Same as scenario #1, but they move away to somewhere with a cheaper cost of living. #1 suffers no pay reduction, but #2 does.

mensetmanusman 5y ago

Companies exist to inflate real estate prices, so they must pay based on local costs! /s

LAC-Tech 5y ago

A lot of people seem to be under the assumption that this is based on "cost of living'. Where I live has a higher CoL than almost all of the US, and local salaries are a fraction. It's about google paying competitively compared to local companies. Nothing to do with cost of living.

theonlybutlet 5y ago

An opportunistic smash and grab, they've found some leverage they can use to their advantage. It'd be fair if the workforce were unionised.