If history is any guide, probably more than zero, and surprisingly blatant and poorly-concealed.
And I don't think anyone's even tried to suss out illegal market-manipulation schemes that are surely hatched at various seems-like-something-out-of-a-comic-book-but-is-actually-a-real-thing rich people secret societies and "retreats" and shit. It's wholly unbelievable that there's not a ton of that going on there, better-hidden than the ones that amount to one CEO emailing another with "let's illegally collude, LOL" (which, incredible as it seems, also happens, but at least sometimes gets caught).
It doesn’t take illegal back channel coordination to play follow the leader.
All it takes is one major company to pull the trigger, then the rest will follow.
The hiring market during covid was wonky in a way that favored applicants, and a lot of folks who got hired were under-qualified, overpaid, or both. This is just a natural reversion to a more balanced state across the industry.
Come on. If Google broke ranks and started aggressively poaching people for GCP and going after market share, Amazon would realize in about 5 seconds that it hadn't "overhired" for absurdly-profitable AWS after all.
These firms have colluded to drive down wages before (the "Techtopus" case), a fact that we know because they were stupid enough to put it in writing. This time there's no proof and may be no explicit agreement, but a tiger doesn't change their stripes.
The way most of these companies are colluding now is by using third party firms that "aggregate industry salary information". So basically company X provides their data, pays some dollars, and get access to what other companies in their "peer set" are paying for different types of levels/experience. Reminds me a lot of the schemes companies will sometimes use to do bribes in other countries -- paying a third party consultancy who they had "no possible way of knowing that they were actually just bribing people".
How exactly is it a 'natural reversion' when even high performing employees are now effectively taking a massive pay cut due to the salary freeze and inflation?
> high performing employees are now effectively taking a massive pay cut due to the salary freeze and inflation?
If any “high-performing employee” feels like they are taking a “massive pay cut” merely due to inflation, then something is wrong.
Either they were grossly underpaid to begin with (change jobs, it can be done if you’re that good and that low paid), they aren’t actually that good (so total comp package, including RSUs and refreshers, is relatively weak), or they have a warped perception of the value of money.
If a dev is pulling in 300k+ (standard, especially the +, at places like MS), and the cost of eggs, rent, or restaurant food is something they actually notice and impacts their day-to-day life, then I wish them the best of luck — they will need it.
A paycut is a paycut no matter how you try to spin it. If someone's earning 150k a year with 5% inflation and doesn't get a raise the next year matching inflation, they are quite literally taking a 5% pay cut in comparison to changing jobs which likely offers salaries starting at the post-inflation level.
In this case it's worse because not only are their salaries not going up, but the things nominally used to get around raising salaries (bonuses, stock) is also not going up. You trying to spin it by saying 'well they're earning 300k+ a year anyways' is not helping your point when there are plenty of junior and mid-level engineers earning far below that which are going to be most impacted.
My thesis is that many of them, especially at places that grew a lot during covid like MS, were/are overpaid relative to their skill set / ability to add value.
Cutting positions was one way to correct this.
Freezing salaries is another.
If any devs hired during covid think that their salary was totally justified and shouldn’t be cut directly or indirectly, then they are more likely than not delusional. It was a frothy hiring market, and the upward pressure on salaries across the board was not healthy for the overall tech ecology, imho (the smaller companies couldn’t afford competent devs).
Note that I am actually an advocate of tech corps sharing more of the spoils with their employees, but not in the way that it happened during the pandemic. Reward competence selectively rather than randomly rewarding just being a warm butt in a seat during a hiring boom.
I have no doubt that during this “pay freeze” at MS, the star performers will still be rewarded somehow.
Okay, but there's a core flaw in your argument: Microsoft has already cut jobs, and now they're freezing salaries for everyone. You're effectively trying to say that everyone at Microsoft deserves a pay cut and that their salary is unjustified, which seems a fair bit more delusional.
It seems to me you're working backwards from the position of 'Microsoft is justified in what they're doing' and then continuing to adjust your position in order to make that statement true. Given that Microsoft is still extremely valued according to their stock prices and that their earnings are higher than ever, citing market conditions as a reason to cut salaries when your market condition is positive reeks of bullshit.
> You're effectively trying to say that everyone at Microsoft deserves a pay cut and that their salary is unjustified
Key employees and high performers will be rewarded at MS and elsewhere. It just won’t be announced in a press release.
If you want to disagree with me or think that what I say is bullshit, that’s fine. The market will have the final say. I’m just a pundit on a message board.
Imho, this move by MS, which will probably be followed by others, is just them exercising their options on their side of the labor market.
If folks don’t like it, they can leave and/or change careers.
There will almost certainly be a little bit of collateral damage, but I imagine that most of the high value-add people will be happy with their pay packages while keeping their mouths shut.
I wish I could short MSFT, but it still seems like a bad move. The whole company is built around being just barely good enough and hard enough to remove that they stick around forever from inertia
The products are all going to keep getting worse as they lose the talent to maintain or upgrade them meaningfully, but it'll take a long time for the company to fade away
The natural conclusion is that jobs (at least in the US) are a type of labor market. There is push and pull on both sides.
During the pandemic, the market heavily favored employees. The market now favors employers.
The direction of the price of labor seems to have been more or less appropriate during each of these periods.
On a personal level, I don’t have much sympathy for folks whose worst experience in a labor downturn is simply not getting an inflation adjustment — it’s about the mildest correction in defined labor costs/benefits that can happen to them. I don’t think these folks realize how close to having no job they and/or their current peers actually are — that would really suck.
To the issue of whether MS should make this move or not (esp. given their financials), that’s a different issue. As I have mentioned elsewhere, I think that there will be quite a bit of quiet total comp boosts to favored folks — RSUs, retention bonuses, spot bonuses, promotions, “promotions” (e.g., different title, same job), etc.
Salary curves are rarely smooth and unidirectional over the course of a career. Most folks, in fact, will have a very spiky salary curve. I think many folks who came into tech after 2009 or so just haven’t seen or experienced this spiky curve, and their limiter range of expectations is showing.
Right. Wealth and power are concentrated and do not need to be coordinated. Their individual actions and self-interests organically merge to maintain the state of affairs that keeps them wealthy and in power.
They kind of do. If Facebook and Google suppress their wages and some other company poaches their best people the buying cartel could easily fall apart.
OPEC suffered from exactly this problem quite early on. It only takes a few defectors of sufficient size.
It created playground for people secretly working multiple jobs for sure.
Before it was unheard of.
Now had to let go some for doing it, cancelled numerous applications and interviews once investigation revealed their scam (applying through fake names, creating multiple deceiving profiles with fake activity etc).
It's frankly starts to be quite difficult to hire honest full-time remote programmers now.
Apple and Google settled an antitrust lawsuit a few years ago for colluding to suppress wages (by agreeing not to recruit employees from each other)[0].
The settlement was a tiny fraction of the amount of money they saved by entering the illegal agreement in the first place.
Just like us engineering workers have groups and forums where we share ideas so do ceo workers. They want to keep their bosses, the shareholders, happy and so they share ideas. Right now layoffs are so hot, and as ceos dont innovate much that’s the trend they follow. No need for illegal backchannels. Just a cool trend. I just hope that those layer off workers that are lucky and smart enough are working on replacements for the googles and microsoft out there because to be fair they are well past their expiry date.
