VMware staff in Silicon Valley can leave a pandemic and wildfire-ridden zone, if they're willing to accept less pay
- Reference: 1599869576
- News link: https://www.theregister.co.uk/2020/09/12/silicon_valley_wages/
- Source link:
The coronavirus pandemic has forced tech companies to shutter their offices as the Bay Area counties enforce strict shelter-in-place measures to prevent the spread of COVID-19. For those lucky enough to work remotely, many have taken the opportunity to hunker down elsewhere, whether it's back to their parent’s houses or at a luxury spot in the wilderness.
Now that Northern California is experiencing its worst wildfire season in history yet, there’s even more reason for people to pack their bags and scram. Thick smoke blankets the sky, choking out sunlight. Residents were shocked when the sky turned into a horrifying Halloween-orange colour earlier this week. Ash continues to fall, and the air quality is at historic lows.
Getting away from the hellscape of Silicon Valley sounds attractive, but it comes at a price. VMware has apparently slashed its salaries for employees previously employed at its Palo Alto office, who have fled for less expensive cities outside the Bay Area.
Moving to Denver, Colorado will result in an 18 per cent salary reduction, whereas leaving for Los Angeles or San Diego, in Southern California, means taking home a paycheck that’s apparently 8 per cent lighter, sources in the firm say.
Facebook also said it was considering readjusting salaries based on location too. CEO Mark Zuckerberg previously addressed questions about remote working in a live video [2]posted on the platform in May. The social media giant announced it was ramping up hiring remote engineers, and didn’t expect employees back in their offices until next year.
Tech's big names start to disclose possible bottom-line coronavirus impacts [3]READ MORE
It’s likely that other companies will also follow suit too if remote working remains in place; there’s not much point paying staff the same salaries to live in some of the most expensive US cities if they don’t live there anymore. The exodus of techies has already caused rents in San Francisco to plummet, making it more affordable to live here, but at the moment who'd want to?
VMware did not comment at time of publication. ®
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[1] https://www.bloomberg.com/news/articles/2020-09-11/vmware-twitter-cut-pay-for-remote-workers-fleeing-bay-area
[2] https://www.facebook.com/zuck/videos/10111936118050541/
[3] https://www.theregister.com/2020/03/30/coronavirus_form_10_k_mentions/
[4] https://whitepapers.theregister.com/
It's a renters market here in the SF area. Residential and commercial.
But, It works both ways. I was constantly turning down recruiters asking me to work in Cupertino, Palo Alto, or wherever Google is.
Add an hour-long commute to avoid what was last year's $1/500 increase in rent (Palo Alto)?
*giggle* Nope.
Find someone else to be struggling on $160K/yr.
Bottom line
From the point of view of the employers, this is all about the bottom line. And attracting talent to Palo Alto always costs more than attracting it to someplace where it's cheaper to live.
However, it will be interesting to see if the talent they attracted stays with the company when switching to remote working at another company is as easy as changing a browser bookmark.
They may be in for a nasty surprise.
California law lets an employee that has taken a pay cut file for what's called "under employment" payments. It's like unemployment, but the worker still has a job just is no longer making what they were hired at. If you take a pay cut & are still working, filing for under employment may get you a federal cheque each month to make up the difference. And your current employer, the one that just cut your pay, will be on the hook to pay the government for your under employment benefits.
Then there's that whole cluster fuck of the wild fires getting folks mandatory evac notices as the flames start torching civic borders. Town about to be consumed in an inferno the fire department can't contain? Grab your stuff & GTFO. Employer then punishes you for no longer living where you claimed? Oh yeah, THAT won't involve any social backlash. That's the stench of a class action lawsuit wafting through the smoke.
I realize the employers want to save money, but if you hired someone at $X & suddenly start paying them less, you might want to do a quick Google on the Streisend Effect & what it tends to do to your bottom line.
Take on a Roommate or 15
I expect people to start having 15 or so roommates in studio apartments at VMWare.
Mostly, they will just be there when they need meetings, and spend most of their time in "vacation homes."
Problem solved.
Cost of living adjustments by location are going to go both ways, of course.