What Happens to High Salaries During Downtimes?

Nvidia geforce
Jun 26 19 Comments

What happens to large base salaries during an industry slowdown, broader recession, or even industry crash? Do people with high base salaries generally keep their salaries, get cuts, or get targeted for layoffs? The motivation is my own personal finance planning and scenario building as an early career person, and to share insight and wisdom.

I’d be especially interested to hear what tech and finance folks went through during the late 90s tech bubble/crash or the 2008 recession. Or well-informed and reasoned speculation. Thanks!

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TOP 19 Comments
  • New bator
    Are you a male or female. Big differences between two and you should specify. For example, men with high high salaries may experience a difference during a recession than women in the same field.
    Jun 26 3
    • OpenDoor bhKv81
      Incel alert 🚨
      Jun 26
    • New / Strategy
      Porsche996

      New Strategy

      PRE
      Tesla Motors, BMW, McKinsey, Porsche
      BIO
      MIT BS MechE, Stanford GSB
      Porsche996more
      Shit theory but would you elaborate?
      Remember lay off vs getting laid.
      Jun 26
    • VMware / IT
      Nomad-

      VMware IT

      PRE
      Google
      Nomad-more
      What do you mean by that? I’m genuinely curious.
      Jun 26
  • Microsoft ohgetfj
    No bonuses company-wide.
    Jun 26 0
  • Adidas coisna
    People outside of profit centers get layed off, as are profit center bottom performers. If you are good at your job in a high visibility team then you are probably safe unless the whole company goes under.

    In 2000, the bubble caused unprofitable companies to no longer have access to capital, so that was just a case of a bubble bursting on poorly run businesses. Aside for doing due diligence on your employer, there is nothing you can do to reduce your personal risk.
    Jun 26 1
    • Apple SamPam
      Basically Uber and Lyft will be shutting down shops. It's very likely that investors won't be putting new money into these companies.
      Jun 27
  • F5 Networks RRA
    They're typically butchered for meat for the company picnic.
    Jun 26 0
  • E*Trade / Finance cbEV72
    Ask you friends at SAP, AOL, Lehman brothers etc. we’ve seen the washing cycle multiple times. There was a time when being SAP consultant meant driving Ferrari. Look at them now. Same thing will happen to today’s techies
    Jun 26 4
    • Adidas coisna
      Idk about SAP, but Lehman and AOL were casualties of terrible management decisions. Many other firms emerge relatively fine even from major downturns as long as the are well run
      Jun 26
    • E*Trade / Finance cbEV72
      Lehman is a complicated story. It’s not just management. Its trouble pretty much started the recession. It was a part of big correction. Seriously chat with guys who were in hot firms and went down. I’ve seen many
      Jun 26
    • Adidas coisna
      From everything I have read and learned, the issues were with poor risk management of bad securities. Other firms involved in MBS did a better job of offsetting it by not keeping them on the books as long as lehman did
      Jun 26
    • E*Trade / Finance cbEV72
      Yes, there was that, however, if it was just that we wouldn’t have recession. Those who were in the industry remember a few distinct events that happened in run up to the disaster: bear stearns, Lehman and gse conservatorship
      Jun 26
  • Amazon Dr 𓂸
    During 2008, first thing salaries got frozen , so no more raises. Then bonuses got cancelled. Over the next years teams got laid off wholesale. It took a good 5 years to get bonuses and raises back. Due to salary compression comp was grossly under market rate so once the economy recovered you were much better off jumping ship.
    Jun 26 1
    • E*Trade / Finance cbEV72
      First, they remove free condiments and other freebies like gym. That’s when you know that the shits about to be flying all over the place
      Jun 27
  • Amazon Northerner
    ✂️
    Jun 26 0
  • Apple aleG37
    Forced unpaid shutdown, lay off, rescinded offers, no bonuses. Someone mentioned SAP, back in the day, SAP consultants made tons of money simply from knowing config and abap. My friend used to pull $200+ per hour. Those people were forced to train offshores or else they would be out of job. Outsourcing companies started to thrive during this time as the management cut cost by forcing experienced ppl to train their replacement offshore. To this day, we still pay for that.

    Edit: this is the dot com bust in early 2000 that hit the tech ppl the most.
    Jun 27 0
  • Apple Snut Ella
    PMs write the business case for laying off devs. Management takes the recommendations. PMs get promoted.
    Jun 28 0
  • Apple SamPam
    You keep the same number but they pay you in Canadian dollar 🇨🇦🇨🇦
    Jun 27 0

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