IT Biggies Deducting Upto 18% Salary For Work From Home Employees: New Pay Structure?

Tech companies in the Silicon Valley, California have decided to cut salaries, in exchange of permanent remote jobs.
Tech companies in the Silicon Valley, California have decided to cut salaries, in exchange of permanent remote jobs.

The new normal in the era of Covid-19 has become the ‘Work from Home’ policy, adapted by all the companies around the globe, especially in the tech sector.

We have covered plenty-some topics related to this, highlighting the different strategies taken by different tech bigshots, in making the best out of this new ‘WFH’ norm.

Now, several tech companies in the Silicon Valley, San Francisco Bay, California, U.S. have allegedly been contemplating over reforming the compensations awarded to their employees, shall they decide to work from anywhere other than in the office.

To simplify, VMware Inc., a software company in California has come up with a pay structure, wherein it will offer a certain pay cut to employees working from remote areas.

VMWare Inc. to Cut Salary

Silicon Valley in the U.S. is the country’s most expensive area to live in. 

In fact, the San Francisco Bay Area was claimed to be the most expensive area for goods and services, including rent, among large metropolitan areas in the U.S., as depicted by data from the U.S. Bureau of Economic Analysis, in 2018.

VMware Inc. has announced that all the employees who would continue with a more permanent work from home approach, shall receive a salary reduction of 18%, if they move to a less-expensive city.

The software company has its headquarters in Palo Alto, California.

The company’s senior VP of HR, Rich Lang says that the company sets its benchmarks according to regional zones and different competitions.

While some employees could expect a pay cut, another set could also be offered a raise, shall they choose on moving to a more expensive/larger city.

Other Companies Pondering on this Reform Include Twitter and Facebook

It is not just  VMWare Inc, which is considering to incorporate salary pay-cuts for those working in remote areas on a permanent basis, even post Covid but the list includes many such tech companies in Silicon Valley.

Software giants like Facebook Inc. and Twitter Inc. have shifted towards a more permanent resort for employees working remotely.

They are considering similar pay policies, as VMWare Inc.

While Twitter has spoken towards having a competitive approach to localizing compensation, Facebook has announced to probably cut employee salary, based upon where they decide to move.

ServiceNow Inc., a cloud-software maker, too is considering to change pay structure for its employees on the same parameters, starting from Jan 2021.

Source: Wire

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