Tech Salaries Nosedive In Silicon Valley Because Of Covid-19 And Remote Work, Other Tech Hubs Spared (guest post)

Tech Salaries Nosedive In Silicon Valley Because Of Covid-19 And Remote Work, Other Tech Hubs Spared (guest post)

If the technology industry was a human being, Silicon Valley would be the heart that pumps blood to every other part of the body. Over the last few decades, the San Francisco Bay area has stood as the pinnacle of technology in the United States. Almost every major tech company you can think of has its headquarters situated in the Valley. It also happens to be an incredibly diverse place since tech talent from all over the world typically moves to the Valley for work.

However, there are other tech hubs around the world that are also shaping the future of the industry. Berlin-based startups, for example, attracted nearly 4.2 billion euro in venture capital in 2017, according to Primalbase. The city is also home to the largest percentage of foreign startups in the EU (a whopping 11%).

Benefits of Working in Silicon Valley 

Before the Covid-19 pandemic started, offices in Silicon Valley changed the game in modern workspaces. Companies from all over the country used Silicon Valley firms as yardsticks for remodeling and providing employee benefits. Unfortunately, only a few could meet up at the end of the day. Some of the benefits of working in Silicon Valley extend beyond a fancy office space with space for sports and wellness programs. 

Most Silicon Valley companies also allow their workers to contribute significantly to how work is done. Pinterest, for example, provides all its workers with almost every tool they ask for as long as they get the job done. Every piece of technology that is promised to make the company successful is provided at Pinterest and many other firms in Silicon Valley. 

Silicon Valley workers enjoy birthday leaves, company-sponsored group outings, and open vacation policies. Most importantly, tech companies in the Valley pay much more money than those in other states. The average web developer in Silicon Valley earns about $155,000 yearly but the national average is much lower. This is more or less the most vital benefit of working in the Valley. Who wouldn’t want to earn that much money yearly and still enjoy a range of other employee benefits? You can understand why many people are learning coding on Computersciencehero.

Tech Talent Flee the Valley for Cheaper Cities 

There is a lot of hype about living in Silicon Valley but there is also a lot of pressure. The Valley is an incredibly expensive and luxurious place to stay. A significant part of your monthly salary will go into rent before you talk about feeding, transportation, and everything else you’ll need. For this reason, tech talent has been leaving the San Francisco Bay area slowly over the last decade. While new people are still moving in, the number of workers that have decided to move to cheaper states has increased significantly in the Covid-19 era. 

In the past, most people who moved out had to forfeit their jobs and look for employment in their new cities. Since the pandemic started, almost every tech worker in Silicon Valley started working from home. Some companies have already announced that working from home will be the new normal. Since they can now work from home, leaving the Valley no longer meant losing their jobs. This explains why the number of people relocating from the Valley is on the rise. 

Tech Companies Slash Remote Worker Salaries 

As tech companies noticed that their workers were leaving the Valley for more affordable cities, they decided to implement a location-based salary model. This model ensures that their remote workers stop receiving Silicon Valley salaries and start getting salaries that match their new homes. Facebook and some other companies have announced that they would implement a fixed 10% salary slash for all remote workers who intend to relocate. These workers were asked to fill an application indicating that they would love to keep working from home for the next five to 10 years after the Covid-19 pandemic has ended. 

Following Facebook’s lead more aggressively, VMware has also decided to slash the salaries of remote workers who relocate. However, they are not removing a fixed amount. The salary cuts will range from 8% to 18% depending on the new cities. Those who move to Denver will have to accept an 18% slash in salaries. VMware has offered all their workers a one-time relocation bonus but it still doesn’t excuse the 18% salary cut for workers moving to Denver. Some of these workers might decide to quit and apply for jobs in their new homes. 

Fortunately, these changes haven’t been as drastic in other tech centers around the world. The average salary for developers in Germany has grown steadily in the last few years, up from roughly 50,000 in 2016 to 63,000 euro a year in 2020. According to an article by .cult, while COVID-19 did affect developer interview invites, the pandemic didn’t have a noticeable impact on salaries.


In the next few months, things will become clearer in the Valley and in other tech centers around the world. However, one of two things is most likely to happen. On one hand, tech companies might change their minds and leave salaries as they are to keep their best talent. On the other hand, they might go ahead with their threats and change the structure of salaries in the Valley and beyond. This second option will disrupt their relationship with their workers and set precedent for other states to follow.