Overpaid FAANG Employees Are Getting A Harsh Reality Check

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For quite some time now, FAANG has been the dream employer for most aspiring engineers and software developers and it’s not surprising why. FAANG blows traditional companies out of the water when it comes to compensation and their perks and benefits are also unmatched. But, over the past several months, the sentiment surrounding the tech industry has changed quite a bit. A significant amount of tech companies have been doing massive layoffs including even Facebook and Amazon. While Apple and Google have yet to do formal layoffs, they too have substantially pulled back on hiring, bracing for an economic downturn. Many of these companies hope that by acting early, they can minimize the long-term damage done to the company and its employees, but only time will tell. In the meantime, we’re seeing tens of thousands of tech workers being displaced, and I doubt they’ll have trouble finding new work, it’s not clear if they’ll be able to get nearly as much compensation. This may end up pulling down much of the inflated silicon valley tech salaries. This video explains the recent tech layoffs and what that means for the tech workforce.

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Timestamps:
0:00 - Mass Layoffs
2:29 - The Mechanics Of Tech Salaries
5:36 - Shifting Landscapes
8:11 - A Crossroads
10:25 - The Future Of Tech Compensations

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Disclaimer:
This video is not a solicitation or personal financial advice. All investing involves risk. Please do your own research.

[ramiroalvarezvaldes]

It’s my understanding that the high salaries at tech companies are paid to Software Engineers. When the headlines mention that X number of tech employees were let go, they don’t mention layoffs by department. I think it would be interesting to dissect this data further. For example, lay-off by department. It would be interesting to know what number of tech workers that were layoff were software engineers, and more specifically senior software engineers. It seems to me that logically tech companies would likely trim office space, perks such as shuttle, meals, etc. Cut down HR and recruiting due to hiring freeze, etc. Cut down marketing etc… The media is lumping everyone from the janitor, to the bus driver, to the chef as a tech worker.

[soapa]

My company is somewhat of a Silicon Valley company, and people used to argue that our salaries are "competitive" to FAANG. Until I found out how much FAANG employees actually make based on TOTAL compensation. The stuff you don't really see outside of base pay.

My friend who got laid off by Meta shared with me his severance was close to $120K and he's only a "mid level" senior. Can't imagine how much the staff and higher employees made. You see even after these FAANG employees get laid off, they still get paid so much they can take their juicy time to find another job. Heck some can wait long enough and eventually go back.

So I can completely understand the overall sentiment of people not feeling sorry for these people.

[blaidd-ppga]

Another fact not a lot of people are aware of are big tech companies over hire smart people just so they don't land up in other companies or start a new company which in the future might be a threat. This sort of overhiring can cause issues like layoffs when the political and financial climate of the world doesn't look good

[kurtloban]

Ironically, there is so much cash sitting on the sidelines that angel investing is at an all-time high I have recently read. The next wave of startups is going to have so much talent to choose from due to the layoffs.

[AccessAccess]

What they don't tell you is that the typical software engineer at a "FAANG" company is working 70+ hour weeks and also in the top percentile of software engineers. They're expected to put the company first (ahead of family, kids, "having a life", etc.) Forget about any "work/life" balance or anything like that. So when they take a job at a "normal" company (along with a pay cut) it is a whole different environment. So many of these workers may actually welcome the change. In essence they've made their money and recognize it's time to move on.

[wg]

I hope they just lay off those who constantly make day in a life of tech firm employee who basically did nothing but eating snacks and drinking coffee, and keep those real talents.

[elcaciquedev]

I think the most interesting thing about "tech" pay ranges maybe overlooked is how broad the field is. There are data, dev ops, platform, front/back end, AI/ML, robotics, network, and so many more different engineers within what surrounds "tech" that the positions mostly being cut are those closer to non-infrastructure related development. Seems to me as if the majority was front/back end positions were most of the advertisement revenue came from. Those in charge of continuing to make the companies processes more commercial rather than efficient became the fat to trim at big tech companies. Which let's be honest, some were absolutely overpaid compared to the overall industry. Now the extra cash is being thrown at AI/ML and Operarions teams that can squeeze more value of what they already have instead of hunting for more users to sell to.

[ThisIsntmyrealnameGoogle]

Beautifully explained. The reality was always these salaries were never going to infinitely keep growing. It's just supply and demand at the end of the day, the key is leverage. During a recession, companies have all the leverage with everyone looking for jobs and their head counts not needing to be as big due to lack of growth. You have extremely motivated and passionate people who are willing to work for 50k-100K less dollars in some instances just so they can have the FAANG name on their resume, and in today's case just to even have a job. The coasting culture is slowly being put to an end, perhaps until the next tech boom.

[maxmustermann]

I actually don't think they are 'overpaid'. The high salaries were simply a result of the massive mountains of cash tech workers generated and companies being forced to actually attract and pay that talent. They may have been underutilized, working on bullshit projects, with management pivoting the companies in a bad direction. That's not the employees fault though.

[Tydrix]

170k a year is a reality check? What a lifestyle.

[elvismark]

The markets are still doubtful that the Federal Reserve will keep to its plan to raise interest rates until inflation is under control, even if bond yields are rising while stock prices are falling. What is the greatest method to profit from the current bear market while I'm still deciding whether to sell my $401, 000 worth of stocks?

[Skilliard]

Most of the layoffs in big tech and startups have been of HR, recruiters, sales, and marketing, not engineers.

And I'd argue that engineers aren't overpaid when you consider the value they provide. A good engineer can produce several million dollars in value to a company. One of my earliest projects as a junior engineer saved a company $2-5 million in annual labor costs and software licensing costs, and that was just 1 project I threw together in a few months.


If you want to see where salaries are inflated, look to executive compensation and Wall Street.

[buffetsbrokersbroker]

My man Hari thank you for getting into the nitty and gritty 🙏people love to scream things are a buy without taking SBC and dilution into consideration

[alimfuzzy]

If you work in finance IT (Stock Exchange) your bonuses are usually higher than your salary.

[OpEditorial]

How much do you think that girl from marketing showing that video of her average "work day" where she was basically answering a few emails and going to the occasional meeting between yoga, sunbathing and helping herself to the free sangria really helped solidify opinions regarding further investment in some of these companies.

[philoslother]

To be fair, considering the rent in San Francisco Making 200, 000 a year feels like making 100, 000 a year, 4500 USD for a one BHK and super high taxes don't help

[danielvasquez]

Yea sir!!! They are now realizing they’re not above criticism anymore!!

[e.sanoop]

Nice vdo. Over valuation, over optimism during the pandemic season and overpaid employees are the main reasons why the tech sector esp startups are facing serious crisis right now. Had they been more realistic about everything, then maybe things wouldn't have been so much worse for them.

[moonlitnightmare]

Silicon Valley salaries were one of the worst things to happen in software dev. That's why there's such an influx of junior devs with noone to take them in. It's also why the field has become so demanding long hours, leetcode whiteboards, off hours learning. You learn the hard way you can't just wave your qualifications and get a job.

[danielvasquez]

Tech will never bottom out though!! Even with legislators, the public outcry, or even these freezes, there’s always something tech related to explode!! Glad to see another video of ours brother, and hope everyone has a great holiday week!!