Google announces salary cuts for WFH employees

Someone is surprised that their salary would drop if they moved 190 miles away from San Francisco?

Google and other Tech. companies need to ensure their pay-scales are competitive and realistic within the context of the area from which they draw their employees. If they are drawing employees from areas with lower cost of livings, why wouldn't they pay less? Why pay an employee NY CIty wages when they choose to live 2 hours away in a very low upstate farmland small town?

Google's response, which seem logical enough to me, and frankly a solid management strategy: "“Our compensation packages have always been determined by location, and we always pay at the top of the local market based on where an employee works from,” a Google spokesperson told Reuters. "

It doesnt matter because it wont last. The market is good right now and many companies are going fully remote. In the long run pay will go up because of the competition for IT workers. Companies will eventually (after leases expire etc) have less overheard without offices so from that savings there should be no reason for salaries to shrink like this. What Google does is not always relevant or applicable to other areas of the tech sector, but I imagine they will have to reverse this or simply offer more to those that do not move away. Other companies will gladly scoop up those that had their salaries cut.

The wage discrimination won't last. Unless Google has a headquarters in Montana there's no justification for paying a remote software engineer living there and doing the same work any less than someone living in silicon valley. On the other hand, it will be harder for workers to share information with each other about the goings on in the company. It will be harder for isolated tech workers to organize. There will be less competition for workers as the market disperses, one result would be no more interviewing for another position during lunch.

Shouldn’t you be paid more to work from home? You’re saving the company a load of money on office space and upkeep. You also (everything equal) need a larger home to make space for a legit home office setup.

No thanks. I’ll keep coming into the office.

twominutes wrote:

The wage discrimination won't last. Unless Google has a headquarters in Montana there's no justification for paying a remote software engineer living there and doing the same work any less than someone living in silicon valley. On the other hand, it will be harder for workers to share information with each other about the goings on in the company. It will be harder for isolated tech workers to organize. There will be less competition for workers as the market disperses, one result would be no more interviewing for another position during lunch.

Companies that operate in multiple cities throughout the country have been doing this for decades, but this wfh twist will somehow be the last straw?

This just shows that there is no such thing as a rational maximizer. Tech companies spend massive amounts of money on extremely high priced office space to be in SV and then have to pay a huge premium for employee compensation because the local housing market is ridiculously overpriced.

Suddenly, employees start leaving the Bay Area for cheaper real estate after figuring out that they can do their job just as well at home as they can in the office thanks to the very same technology that they work on for a living.

A company that had officers and directors who were really concerned about managing expenses and shareholder value would see this as a big opportunity to slash costs by ditching SV for a combination of remote work and dispersing offices to other parts of the country where office space is a fraction of the cost in SV.

But no. This will never happen because all the C suite people at the tech powerhouses have multimillion dollar homes in the Bay Area with stunning views of the ocean and ski in ski out chalets in Mammoth Lakes. They would rather blow millions every year on expensive SV real estate and excessive employee compensation than have to go live around the commoners in Columbus, OH or some other place where they could save millions in fixed op costs.

SO glad to see these companies growing larger than any national empire in our lifetimes without any responsibility to government policies or any democratic system.

Just wait until Google demands their employees to live in North Dakota or Louisiana to save some costs.

Capitalism?

Google has made plenty of millionaires. You don’t like their policy, get a job somewhere else. Google employee is going to look pretty good on a resume.

wont last wrote:

It doesnt matter because it wont last. The market is good right now and many companies are going fully remote. In the long run pay will go up because of the competition for IT workers. Companies will eventually (after leases expire etc) have less overheard without offices so from that savings there should be no reason for salaries to shrink like this. What Google does is not always relevant or applicable to other areas of the tech sector, but I imagine they will have to reverse this or simply offer more to those that do not move away. Other companies will gladly scoop up those that had their salaries cut.

This.

This move is just a stop gap on current employees. It won’t be sustainable and top talent will always demand top pay. Google is kidding itself. Just like any company that thinks tech employees are going to return to offices like before the pandemic.

Rainy Day wrote:

Google has made plenty of millionaires. You don’t like their policy, get a job somewhere else. Google employee is going to look pretty good on a resume.

It is not that great of a place to work, that is why most people put in 2-4 years to have it on the resume and then move on.

Googling expert wrote:

Just wait until Google demands their employees to live in North Dakota or Louisiana to save some costs.

Or India. Wait…..

jamin wrote:

Everyone knew this was going to happen.

Google employees who move even farther away from the company’s offices have been warned they could face even harsher pay cuts. A worker who left San Francisco for Lake Tahoe, another expensive area of California, would have their pay cut by a whopping 25 percent.

That would mean an employee with a $150,000 salary would suddenly make less than $112,000 per year.

https://nypost.com/2021/08/10/google-slashing-pay-for-work-from-home-employees-by-up-to-25/

This is fair, AND prudent on Google's part.

Pretty much any company worth its salt has COL adjustments for offices in different cities. This isn’t a new concept.

Yes, I think an adjustment is justified for COL of the pay-scale in which the employee resides.

But i also think it would be justified for employees to receive a stipend for expenses related to working from home. That would compensate employees for things like high -speed internet access, telephone service, expenses related to a home office, etc.,

I can't imagine that a business doesn't understand the costs that they - the business - are avoiding by passing those costs onto their employees who work from home.

Eh - Most people are more than making up for those expenses by saving on commute costs, parking, wear and tear, etc. And those are just the monetary savings before factoring in the general convenience and well being.