The (Overdue) Collapse Of Big Tech Salaries 

So if you are to participate in any industry that literally just started you are screwed? What kind of logic is this?

truth logic@@granddefectus4602

@@granddefectus4602 use your brain a little grandpa. Take a break, read my comment again, and simply delete your comment

@@granddefectus4602 what industry just started im 18 and just graduated with a diploma in ai and analytics and i feel quite fucked cos of how high competition is

Every generation has its challenges, yours isn't special.

no they aren't. people back then were living in smaller houses, they were poorly insulated, they had no airconditioning... people were dying much younger. tech people started getting paid like bankers, who were always getting paid, not like the middle-class.

The problem really is freaking housing. Housing just has to be changed this clearly doesn't work.

@@rtothec1234 weird how there are still milllions of actual construction workers then. and they're getting paid nothing close to software engineers. yall are rich, and crying poverty, and it's not pretty.

@@quAdxify tech needs to employ people in places like peorio or how about west virginia or any town where you can by a house for less than 200k.

@@perfectallycromulent not to mention how hard construction really is compared to tech.

Average home values in the early 60s where also in the $11-18k range, but now they're way above the rate of inflation.

Median house price in the US in 1961 was 19K so your dad could almost afford a house with one year worth of salary

no it's the lucrative nature of the tech companies getting all kinds of free money from investors looking for the next big thing and also how software can scale at lightning speed. once you develop some application you can just copy it a million times in a heartbeat. and now every software is a service so they keep milking it . they stop supporting older versions that you purchased. now you have to subscribe and pay multi thousands a year for it.

@@ronblack7870you’re also right but what he said is also a big factor, if not the biggest. IT is saturated and not just in USA. That’s why salaries are falling or stagnating

​​@@markonikolic7957I think both of you have valid pieces to the puzzle of why (saturation/ end of investor fomo). The last piece I'd add is: the macro-economics. High interest rates have dried up cheap money. Naturally, salaries will be effected and the most bloated sectors (IE tech) will be effected the most.

@@markonikolic7957 quick, ratio ron!

I don't think high skill software dev jobs are saturated. People are still pulling multiple offers and having FAANG outbid each other over them. The idea of saturation implies there is a fixed need for software developers.

yep

Yes, I agree. Anecdotally, I work for one of the companies often shown on this channel, and salaries are lower now than peak pandemic, but they are higher now than the years before 2019 and earlier. I'm going by new offers because a lot of times the comp you get offered to start anchors your future raise / promotion numbers. And you don't really get your salary cut at these places Also worth noting, if you got a peak offer, your comp was still highly in stock, and so the actual value would have gone down as stock fell between grant and vest dates.

@@fark69Part of the problem is that places like levels.fyi does a poor job of distinguishing between the parts of an offer (e.g. what's your target comp and what's exceptional). That said - the entire premise that newer hires get paid less because of the vesting schedule is just wrong. They get cash equivalent to bring them to their target comp, that cash is paid monthly instead of vesting a couple times per year, and it's a predictable amount. I'd happily trade my RSUs for more predictable cash flow. I think the channel owner lacks experience here and therefore doesn't quite understand what's going on.

yeah... you should realize stock compensation is not actually something that the company pays but rather it comes from diluting the existing shareholders so more like the investors and stock owners who are paying for their salary. works well while stock is going to the moon but shareholders wont be happy if the stocks are performing poorly. you do this while company is not growing and shareholders will probably vote to force the board to cut stocks vesting or fire the CEO or something

@@IamAWESOME3980 yeah it turns out tech was just gambling the entire time. real companies with sustainable business models wouldn't do this RSU-heavy compensation

we shouldnt reward new products we should appropriately reward good long term sustainable products only

Thats right. Overpaid tech workers 90% of who do NOTHING while pretending to WFH. The bankers & investors are the ones who make all these things possible. Show some respect and be thankful

R&D is, and always was, and always will be a cost centre. It does not create value directly. All those "bankers and traders" are essential for turning R&D output (in fact, tiny fractions of it) into a value.

Sorry y'all's salaries are being cut but as someone working in an essential industry working with people etc. I hate to say that tech industries and others are being paid way too much. There's no reason why an EMT should not be paid more than a software engineer, you can list all of the skills everyone does it still doesn't match the skills and mental dexterity and focus the emt has to do to do their job. As well as other industries....social workers, CPS, mental healthcare workers, nurses etc. It's totally out of control and needs to be reigned in. No reason why people working in these industries need your salaries hanged over our heads making us feel like we made the wrong choices in our lives when we do honest hard work that is essential and should be valued and paid as such. It sucks all around and I just see it as karma and the universe hopefully fixing or turning things finally. Maybe this would get everyone on the same side to go against these CEO's, government officials and insurance companies to deal with this wage stagnation and treating their employees across the board fairly and keep up with inflation.

@@Dr.Beetlejuice110 you're absolutely right, but I would not expect a long overdue correction of obscene salaries of the coders to result in increase of incomes of the true essential workers, sadly.

I was delighted with $500 - First decent bonus I got in a long time. They even worked it out to pay me more so that after taxes I'd have a $500 cheque. Nice. The way I look at bonuses is, I already get paid for my work, so anything extra is not expected, but appreciated. In my last job I think I got a hat. I was still thankful..because they had to give hats to EVERYONE ..so it cost money

The government does the same thing

It's no different than paying someone more for living in a high cost of living area, cost of living adjustments of that nature are extremely common. They just started in the high cost of living area with big tech.

You can just be tax resident of higher cost of living country with lower taxes.

It’s to sustain jobs for people in the hiring locations. If everyone moves to the city just to poach lucrative jobs and leave, that deprives the remaining locals of both the work opportunity and the income and the local community of the taxes. Adjusting income per living cost is fair

@@bp24964s No its not. Companies don't give a shit about the local community or "fairness". At best they'll use those as justifications for PR purposes. They do it purely because it saves them money and boosts their profit margins. The bottom line is the _only_ thing publicly-traded companies care about, because its the only thing shareholders care about.

Yep true

What language do you typically write in, what is your role and how much have your skills advanced since beginning your careerr?

I wouldn't say 100k is a small salary though

HCOL yes, but not necessarily only for top tier level graduates

A senior developer should make double that. I live in MCoL (Denver) and the salary for a senior is a LOT more than 100k. 100k is what I make right now as a junior.

Underestimate the joy of being underpaid? Maybe lol

@@fr5229 Engineers are massively overpaid. And for the most honest of us this evident inefficiency is painful.

@@vitalyl1327 Maybe. I have the belief that people tend to undervalue themselves. If the average engineer really felt overpaid, there wouldn’t be so many clamoring around a handful of big companies where they will have relatively less impact

@@fr5229 if you graduate from mcdonalds, then yes you will be underpaid

Just another way of saying I'M GREEDY

No there’s not

@@Solofopholothere most definitely are

It’s true

Startups depend on high quality employees far more than larger and more stable companies, so they have to be able to attract the most experienced and high valued people. Meaning, they have to compete with the top of the market (e.g., finance), not with the market average.

The old wisdom used to be "Startups for higher salary, established companies for stability" but layoffs all across the industry sunk that logic.

I do too. How are you not gonna be a millionaire in a short amount of time? It's pretty easily doable on a mid-level FAANG software eng salary in 10 years or (likely) much less

@@fark69 I'm not based in the US so my TC is in the low 6 figs. Also I'm still entry level. But yes 10-ish years is probably doable if i consider career progression, although I consider "short amount of time" to be a few years so that's the subjective term there.

I make 150k working 20 hours a week in restaurants 😂

FAANG job is pretty smooth-brain

@@magicxsquare_doing what

Yeah, but management is a tough position to be in. It's probably super stressful now with a whole generation that will get offended over anything and feels the company owes them for just being there.

Hahaha

@@LogicallyAnswered I worked in tech jobs before and got pretty far, but when companies want to pay staff overseas and cut your wages, makes trying harder a waste of time. I made more money opening my own business and putting it towards stocks instead.

What makes you think *everyone* will still be able to go to school anymore?

@@Darth_Bateman There's billions of dollars in the college industry, those institutions will find a way to sucker their customers back.

Yeah what's even the point of working for only 200k tbh

Cost of living can't be ignored. $120K/yr in the bay area is more like $60K in an area with reasonable cost of living. Still well above US median-income (2x), but not crazy.

This was a pretty average new grad package in the bay back in 2017. Nowadays an average new grad package at a reputable company (or startup, but they don't hire many new grads anymore) is higher than this by about $50-60k

Wow that's decent! I appreciate this knowledge. I'm really new to USA so I'm trying to understand and learn allot about the country. In fact, I'm still not sure how to use the train system in Ney York and sometimes get lost. @@fark69

120k a year now isn't even middle class

@@alastairhewitt380damn, I wonder how the average American survives then…

Glad to hear you were able to turn it into a positive Daniel!

@@LogicallyAnswered Thanks Hari. Good luck to you too. Watching all your videos. Loved to see how you explained how faceless AI videos will take over, and started rebranding a bit to show yourself. Great stuff. Continue what you do, it's great 🔥✌️

AI will take over your tech job.

It can't as I don't have a tech job anymore :)@@sawadeeh

if it does get ready for skynet to take over @@sawadeeh

True

And then they have to pay for it by hiring private contractors at a steep price

This isn't really true. Outsourcing is becoming quite expensive. Good Indian eng packages are getting close to and sometimes beating MCOL and LCOL US eng salaries for the same level

Outsourcing has always existed, but the quality eng move to the US for those high salaries. No company can afford to stop paying those without losing innovation to their competitors

The market is oversaturated. Hopefully a reset happens with salaries and the housing market so that everything stabilizes

"It's still absolutely amazing pay, especially where I live where cost of living is much lower." Don't worry, they factor that in so that you living in a lower cost of living area means you get less money. Check their job postings and it almost always says "location" as one of the variables.

Yup but where these companies are located, it's middle class

To the inevitable person who says "well they just need to live more frugally", thanks! so you agree they're not rich then

The struggle is real hahaha

Maybe you are only able to attract shady developers who plan on working multiple jobs at the same time. Or maybe your office premises are shit. Are they located close to your candidates or are you asking them to do hours of daily commute? Do your offices offer a good work environment? Sometimes developers are being offered crappy open office spaces full of noise. Terrible environment to perform focused work.

it's a really hard sell to go back to commuting every day when you don't have to - such a waste of life

Who hurt you, 😆

@@kevinjomes5753 Bud, you're being a giant f49.

yeah, he is completely clueless how faang level tech companies' compensation works lmao

I understood his point, tough. He's saying that Amazon expects most employees leave within the first years, while Google flips it to make it look more attractive when you join.

@again, that’s cause you have no idea how these companies comp work. Amazon pays massive cash bonus first two years and google pays refresher that stacks. The only time your salary goes down is in your 5th year when your initial stock grant runs out. He has no point so there is no point to be understood

John Deere needs to make products that are compelling and can command better profits. Then they'll be able to pay better. Facebook makes like $10-20 per user and has billions of users. That's why they pay so well.

deere can easily handle that salary, in fact they may need less engineers with all the violations to right to repair nonsense they are constantly implementing

Gross profit of $23B in 2023. Yes they can pay that.

Do you work for Google or Meta? I’ve heard those two pay the most

Damn it!!!! That's why I didn't get the job. I asked for 5 million🤣🤣🤣🤣

Nah, those pay packages are mostly "stock" and there's a whole lot of politics, investors vs shareholders, etc. stuff that needs to go right for you to get that whole pay package. Most likely the shares are 0.60¢ on the dollar unless your chosen company kills all the other AI companies and dominates (I believe it's unlikely for that scenario)

@@fark69 base salary is still 300k to 500k. Runs on par with Netflix. Unless you with HFT, that's about as good as it gets in tech.

Thank you Balpreet!

Does it make sense to you to major in IT or should I pivot to another degree when I get my AA in IT?

If Stripe is a trendsetter in tech salaries, he's right. Look on levels to see their new offers for a given level of engineers and it's definitely declined over time

@fark69 A temporary slowdown due to macroeconomic factors. Once the economy comes back full steam many large startups will start offering mega salaries again. It's an inevitability

@@Denastus IT is still a great degree with a ton of options. If IT is what you want to do, then don't let anyone dissuade you from pursuing it

Exactly. Many jobs even with phds will never earn the same tcomp as some fresh grads from tech in 2021

This is not normal. 99.999% of engineers will never land a job at those companies. The vast vast majority are working corporate tech jobs for a fraction of that comp.

Yes it's the same except perhaps at Google who have two classes of stock

Thanks man! levels.fyi

Be aware when using levels that the stock based compensation at a non-public company is not equal to cash or stock from a public company. Especially big non-public companies about to IPO. The stock is often not worth what it's valued at on paper when the IPO comes around and your window drops allowing you to liquidate the shares

yep! i parroted his fact about amazon’s stock on blind and an amazonian quickly corrected me

Yes, Blind is a better source of truth here as you actually have people working in those companies. There's also some misinformation on this vid as generally people get refreshers every year, otherwise the TC between different years would be too drastic.

The bridge cash def makes much of the gap in terms of paper comp, but the average Amazonian who leaves after 2 years ends up with very little stock/stock growth (often the most lucrative part of tech comp)

@@LogicallyAnswered you make no sense. they can give you 200k cash and 200k stock, or they give you 400k cash and you have the option to buy 200k worth of stock from that. You just have more options. Its better in every way.

@victorvaleanu Logically Explained was saying that since the average tenure at Amazon is less than 2 years, they’re only on average hitting the 5% vesting and maybe the 15% vesting.

This is why I always prefer a straight-up salary to any vested BS or if something does vest it better be 3 years or less. Unless you're switching roles within the same company, staying with the same company for longer than say 3-5 years is a waste of time IMO.

Can you explain with an example?

You get large bonuses in the first 2 years that roughly equal what the larger stock amounts would be in the later 2 years. Ex: 120k Base + 5k stock + 50k bonus 1st year. 120k Base + 55k stock 4th year. Assuming that the stock amounts stay the same, you would get the same total pay in years 1 and 4.

@@tydal6516 thank you

🙏

Never heard of such crazy mortgage loan before

yeah even an average $400k house at 6.5% is north of $3k, it's crazy. I was so lucky they fired the director at my old job in CA 8 years ago and brought in a crazy nut. I probably would have stayed for the RSU's if it wasn't for him (they are nice but the taxes suck), the idiot ended up not finishing the year. Unless the house is a dream house I would not recommend a young person buying a house. @@dieglhix

That is the new normal. Kids see it as normal and they get FOMO. If the housing market goes south and it starts to cascade down it's going to be rough for many people. I was months away from living out of my car once (after a divorce I then lost my job) and it was scary. No one cares about you when you are having tough times. It did make me realize I needed to save money and I was lucky the economy picked up. It could have been the time we went into a depression. I try to tell people to live cheap and not take on too much debt. I was lucky to get a house before prices went even more cray at 3% and I was just lucky. $400k at 7% is not a good option. @@dieglhix

I put all my money in crypto. I feel that's even less riskier than a multi-decade loan with these market changes. Hope I can buy a home with this lifetime bet.@@rockpadstudios

On the flip side, stock comp can be really strong too :)

I like my company stock that's part of my yearly rewards. I don't factor it as part of my direct pay, but it's done nothing but rise and rise since I've been here for almost 10 years 🤷‍♂️

Oh my, our education did you wrong.

@@LogicallyAnswered only if you do not factor in taxes you supposed to pay

The downside of not getting paid in stock is the taxes you will have to pay if you were to be paid if you were on a salaried position. Claim that you only make $1 and pay almost no tax.

I was originally an EE major until i realized how few fabs there are and how that strangles the pay. At the time we had fairchild and national semi on the same block, yet they made sure not to compete.

Thank you Mota!

Depends on if the total stock grant is still the same amount. Oftentimes, companies use front loading just to have more attractive first year comp figures.

Good luck!

@@LogicallyAnswered Thanks hari

Capital gain tax on appreciation. So each dollar is taxed once.

but FAANG is buying all the new startups that have potential

@@irfannasim9092 Sure, but that doesn't scale infinitely. As FAANG starts focusing more on their bottom line, they'll get more cautious about their wild spending - including purchases of startups. And some of those startups will have more potential than they realize. FAANG themselves only exist (well at least 3 of the 5) because Microsoft was too scared of antitrust suits and the other "big" players like Cisco and IBM were too focused on "core products" in the early/mid-2000s as the dotcom bubble was bursting while many of the startups that survived the crash went on to be at least moderately successful, and a handful like Google went on to be massively successful as we all know. The cycle will repeat. The current 5 will get scared, another tech bubble will come, and new guard will replace the old. There's a bit of a wildcard at play though - Microsoft. They're doing way better than most of FAANG, and way better than most people realize because they've kept extremely quiet about their goings-on while they silently lap up the likes of Minecraft, World of Warcraft and many others (sorry I'm a gamer so that's what I know - its not limited to that industry). And of course they bought OpenAI as well - kind of a big deal at this point in time. What they will do with regards to buying startups as FAANG "matures" is anyone's guess. They are, at least in principle, one of the "mature" companies themselves but aren't entirely acting like one and I don't think anyone knows how their actions will play out as the rest of the industry changes shape over the next decade or so.

Probably hahaha

That's because it was never as inflated as in the US

It still has problematic spots that are nearly as bad, but it's contained. Housing market is a joke.

This channel is class betrayal by a working-class traitor, the real reason for salary cuts is the falling rate of profit. They must x2 or 10x their profits for shareholders, cuts in salary is the first thing they do to increase profit. It's just pure greed rationalized as a "salary correction" it's BS.

They are not now

@@segante lol, idk I’m from Europe-CH

That’s why they are hiring in India, they have very driven employees who they can pay more than 5x less than in the US.

If you just graduated and have a job right now. You're in. Hold onto it

@@fark69what if I just got an internship at FAANG? Pls tell me I’m gud I wanna be rich 🫣😭