Software company VMWare announced recently that employees that opt to work from home indefinitely will be asked to accept as much as an 18 percent reduction in pay. Now, other companies in Silicon Valley have announced similar plans to decrease salaries for those that choose to work from home.
According to a report by Bloomberg News, companies in Silicon Valley may reduce pay for employees that opt to work from home indefinitely. Both Facebook and Twitter confirmed that they may adopt policies that would reduce pay for employees that opt to work from home.
VMWare Senior Vice President Rich Lang said that salaries are based on the “cost of labor” in an employee’s home region. For this reason, some employees could potentially receive a pay raise if they move to a city with a higher cost of living. But for companies based in Silicon Valley, practically any work location in the country has a lower cost of living than the traditional home of America’s high tech industry.
Software company ServiceNow is among the companies that have announced plans to reduce pay for employees that opt to work from home. Chief Executive Officer Bill McDermott said that he believes management will continue will to determine which employees are permitted to work from home.
“I don’t believe we should have an environment where management is not involved with those determinations, because what you could get into here is a situation where employees then become the decision-maker in working literally from anywhere, and you would have a hard time organizing and holding together a culture if that was the case,” McDermott said.
Although ServiceNow Inc. has yet to make a final determination regarding pay reductions, McDermott confirmed that salaries will not be adjusted during the pandemic.
“Are we going to adjust their pay when they’re in the mountains of Colorado for a couple of months where they feel safer? Probably not,” McDermott added.
Stay tuned to Breitbart News for more updates on this trend.