Would You Take Any Kind of Pay Cut to Work Remotely?

When we look back, 2020 will certainly be the year that technology companies finally had a necessary reckoning with the concept of remote work. For years, many technologists insisted that they could do their jobs from home, even as their employers spent millions of dollars—sometimes billions—on fancy offices designed to keep them at their desks for as long as possible.

The COVID-19 pandemic changed all that. In its wake, Facebook and other companies have announced that technologists can now work from home—but if they move to an area with a lower cost of living, they’ll face a pay cut of some sort. In addition to Facebook, VMware and ServiceNow have either implemented or publicly mulled the idea of compensation reduction for some remote workers. 

Not all tech firms are tying remote work to salary reductions. Twitter, for example, was one of the first companies to announce that the majority of its workforce would now operate from home—but hasn’t (yet) said that it would cut the pay of an employee in San Francisco who decided to move to, say, Boise. 

So here’s the question: Would you take a pay cut in order to work remotely?

Now let’s look at the broader picture: How would such a pay cut (hypothetical or otherwise) actually impact currently software engineers’ bottom line? As an example, let’s look at how much entry-level software engineers get paid at Facebook, VMware, ServiceNow, and Twitter, the companies we mentioned above; for that data, we’ll turn to levels.fyi, which crowdsources compensation data from employees. Yes, that’s not the most scientifically accurate way of determining salary, but the data from levels.fyi usually aligns strongly with other crowdsourced-salary sites (such as Glassdoor), which suggests it’s in the right ballpark:

None of these companies have offered guidance on how much they’d potentially cut the salaries of remote workers, although the ultra-high cost of living in the Bay Area (where these companies are located) suggests those cuts could be quite deep and still allow technologists to maintain the same standard of living in many cities across the United States. Last year, Business Insider used an online cost-of-living calculator to show that, in a number of cities, the cost of putting a roof over one’s head was 10 percent to 25 percent less than in San Francisco

Now take a look at the numbers in the chart above—and keep in mind that, for experienced technologists at those companies, total compensation can easily go twice as high, especially when the firm’s stock is doing well. A 10 percent or even 25 percent cut likely wouldn’t impact them materially if they moved to an area with a lower cost of living—the question is, would they willingly submit to such a reduction?

All polling data suggests the answer to that question is “no.” Throughout Dice’s ongoing COVID-19 Sentiment Survey, technologists said again and again that they were very highly opposed to taking any kind of pay cut in exchange for remote work—especially since the majority have already been doing so for months. In total, roughly 3 percent have said they’d be willing to take a 15 percent salary cut, while only 1 percent would take a 25 percent cut. Around 76 percent, meanwhile, have said they wouldn’t take any kind of cut in exchange for remote work. 

As Blind (which anonymously surveys technologists about a variety of issues) recently reported, a notable portion of technologists would be willing to take a pay cut in order to relocate and work remotely:

However, virtually none were willing to take a pay cut of more than 20 percent, and relatively few were open to even a 10 percent cut. Again, there’s a general sentiment among technologists that they’re more than capable of executing on their daily tasks from home, and there’s no real reason why they should be financially penalized for that.

If companies want to pay their technologists less for remote work, in other words, they might get away with a slight reduction, but it’s very clear that employees are unwilling to suffer significant cuts, even if their salaries are quite high. Would you take a pay cut to work remotely? (We’ll publish the results of the above quiz in a future article.)

22 Responses to “Would You Take Any Kind of Pay Cut to Work Remotely?”

  1. Due to COVID unemployment the jobs posts shows the applicant numbers are very high for most of the positions. The applicants possibly including H1,H4 EAD, F1 EAD etc. And also there are internal hiring or reference hiring as well (through their own chain of staffing their people).
    Rate cut is acceptable at this moment which still good amount than UI, Cares act.

  2. David Long

    The very thought of this is despicable. You’re doing the same job. Same productivity. But cutting your pay?

    Explain to me what extra work a supervisor is doing to earn the extra cut . Oh, that’s right, he or she’s probably not doing anything extra. So where would that slice of money go? To the owners and shareholders, most likely. Another way to drive wages down and fatten the bottom line. Another step in the disregard of labor. Another example of trying to squeeze every last dime of profit while not giving a damn about the people producing those profits.

    And let’s not forget how this blurs the line between work and home. I’ve been working at home for over 7 months now and people think they can message me any time of day.

    Sorry. NO! When the CEOs take extra vacation or stay home, do THEY get a pay cut?

  3. This idea just shows how cheap companies really are. It’s all about their profits and meeting Wall Street expectations regardless of the toll on their employees and the environment. No interest at all in helping their employees to get ahead in their lives. I recently made a move and I took a $15K cut to move to a new city and what I determined is that the cost of living wasn’t much cheaper than where I was previously living. I would not do that again.

  4. John Chambers

    There is no free lunch. There should absolutely be a pay cut to move to TN and KY and other “low cost” areas. Good luck getting along with the locals once you’re there.

    • John — Your multiple responses above are not relevant to the question. If folks in KY are able and willing to do a job remotely for 20% less, that is their prerogative. Workers in the SF Bay area would feel the effect of that just as much as remote workers, because as many others have pointed out, remote employees do the exact same work as on-site workers.

      Also, it sounds like you’re being openly discriminatory against people from KY, MO, TN, etc??? Perhaps that’s related to your beliefs on remote work compensation..

  5. Randall Stegemann

    Other than the amount spent commuting, I find this insulting. Companies also save on utilities and supplies that employees will use more of at home, as well as office and parking space. I wonder how much they save by not having employees on site, yet they expect a pay cut to be embraced.

  6. Bill Thompson

    Sounds preposterous to me. These companies are already saving quite a bit on the cost of operating a building, and they are opening themselves up to a huge savings in real estate costs. Why do they feel the need to further improve their financials by punishing employees?

  7. Celeste

    I agree with majority on this. The job description has not changed. If anything productivity tends to sky rocket with WFH environment. The company’s over head will reduce drastically from not having to pay for utilities and lease space. This is a predatory move on the corporation’s end.

  8. Absolutely not. If anything, companies should want to pay remote workers more than in-office staff to incentivize WFH because then they don’t have to pay for expensive commercial real estate, security staff, cleaning, heating/cooling, parking, and all the other sunk costs that come with office space.

  9. Having worked remotely from home for the past 10 years, I find that employers tend to expect more productivity from remote workers (and get it). Therefore, I would not accept a lower salary for working from home.

  10. I work as a contract software engineer, and I will bid less for a work at home assignment only if I will never have to show up on site, or if the client will reimburse travel, meals, and lodging expenses if they do need me on site, and that reimbursement is based either on GSA per diem amllowances for that location, or is based on actual reciepted expenses files on an expense report. I also bill for the time I spend filling out that expense report. I do not bill for actual travel time unless I am able to do my normal work while travelling.

  11. I’m going to diverge slightly from this question, to take this opportunity to point out a hypocrisy many U.S. employers of I.T. workers are guilty of. While nearly all of them have offshore programmers as part of their mix, and 95%+ of those programmers will never set foot at the U.S. work location, nearly every U.S. firm listing “Remote” jobs on Dice & other jobsites insist that these jobs remain Remote only until COVID is “ended” (and appear to have a delusional Trumpian ideal of how rapidly that will occur). These so-called American employers are largely unwilling to offer the same Remote opportunities to American workers, that they have for years given to offshore programmers.

  12. What you do is simple:

    Take the job and continue looking while you work. When you get what you want… then 1 week notice and bye…. unless obviously they give you a RETROACTIVE SALARY increase 20% more that you were doing before cobid

  13. For those of you who say you wouldn’t take a pay cut, I completely empathize with you. I wouldn’t want to take one either. But the reality of the new work-from-home paradigm is this: if you live and work in the SF Bay Area, then there is a guy in Florida or Kentucky or Missouri who is willing to do the same job that you’re doing for 20%-25% less and your manager damn well knows it. If you work for such a company then keep an eye on their job postings. When you see your job type posted with job location=anywhere, check the salary offered. If it’s lower than what you’re getting then you might be taking that pay cut anyway, like it or not.

  14. Don White

    Just because I am working remotely does not necessarily mean my expenses are less. Yes I am saving on gas (I drive an electric, so I don’t get to save), but other expenses increase. My utilities as I am home all day, my internet needed a bump in speed, I am using my cell phone for business more. I tend to work more and have more expected from me since I am from home.

    Without me coming into an office, the corporation is saving as they can reduce the office footprint saving on rent, utilities, internet. For those that have snacks and drinks in the office, those budgets can be cut since there are less in the office.

    In the long run the organization is the one saving the most from working from home, why should I take a pay cut for that?

  15. E G Hoffman

    The company I work for has been able to significantly reduced the office space it owns and leases. With that they eliminate utilities and property insurance. Reduce casualty insurance. Eliminate the parking “benefit” and on-site gym and other similar services. Remote work reduces overhead costs. They do not compensate me for my internet costs or utilities. My pre-WFH work involved conference calls – so the WebEx or Zoom services costs are similar.

    Companies should be encouraging WFH because it saves them money.