Lots of people are having meltdowns over this, but here’s why this is the right (and only) sustainable move for @Facebook:

Facebook had offices in multiple locations already- they’ve been globally distributed for years. Facebook pays highly competitive, but highly competitive against the local market. This is how practically every major tech co pays today.

If you haven’t studied compensation you might not know that market rates for tech work are lower everywhere outside the Bay Area. So taking FB as example, and engineer in London (even world class ones-see below) are still paid less than if that same engineer works in Menlo Park. https://twitter.com/dan_abramov/status/1263828860057067521

So if FB allows thousands of people in the Bay Area to move but keep their same compensation, how do, say UK counterparts earning ~60% of the wages of their former-SF counterparts who now live in places that would locally pay 30% of those wages? Spoiler alert: not good.

So you might be thinking- FB has $$$ can’t they increase everyone’s comp? At scale that isn’t sustainable, not even for Facebook. And if they do this, there’s a very problematic long game for the global economy.

If FB pays SF rates for all nearly 45k employees, the 1000+ already globally remote startups (and likely many more bandwagon ones) may not be able to compete for talent with FB at all or they may suddenly have to follow suit (despite not having $$). This would be a major shift.

The only companies I know that hire globally with a single rate of pay anchored in any city are all below 500 employees globally. And the only company I know with a single rate based on SF never plans to grow above 100. This is responsible as long as they stay small.

When FAANGs set the tone for global pay, it impacts all tech. And if tech people move in droves to desirable low cost places, at scale, this will rates in those local economies + hurt the avg non tech resident who can no longer afford rent. There are already places like this.

So kudos FB. With this choice, you’re actually helping most people in non tech jobs be able to afford their local rent in the long run, and small businesses be able to compete for top talent around the world.