Why does Microsoft pay so much less than other FAANG, but makes more than most of them? What benefit do they see with this model that others don’t? And why do companies like Stripe, Lyft, etc. pay so much more, but make so much less revenue & earnings?
Because they are not based out of Cali Bay Area
Microsoft has great work life balance and gives benefits that other companies don’t have. The work culture is much better there! As for why it pays less, I can give an anecdotal evidence: 20 PMs in Microsoft do the same scope of work done by 5 PMs in other FAANG companies. The scope of work per person in Microsoft is much, much, lesser because they employ more people. And when you employ more people, then the pay per person is less. (Source: worked in Microsoft for YEARS and can attest that the work life balance I had there was the best in my career. However, the scope of work was very less. Other FAANG companies may pay more but it comes at a price!)
Because we are ok with the attrition rate: if you leave, there's at least 10 motivated new grads that would gladly take your spot for less pay because we are Microsoft, your dream company. Also stock buy backs cost money.
Because we are ok with mediocre talent.
Sounds like I’d fit in well at Microsoft 😎
Why are they ok with mediocre talent. How can you create the world’s best sw products with mediocre engineers?
Because people accept the offers
They have a huge moat around their products so not much need for extreme technological innovation to compete with other companies, mostly just maintenance work from the tech side, so they can just target 80th percentile TC and settle for above average but not insanely good engineers.
I have seen people work 10-20 hours/week. Their hourly pay is not low. And some people they already have very good passive income they don’t work and they don’t care. But truly not fair for hardworking ones. Just run if you still need to live with TC
Microsoft is a good company to join if you want WLB and stability. They are heavy on process and red tape. Compared to FAANG or startups, they generally move slower. So it’s less stressful. Now, before a Microsoft Blinder responds by saying WLB is not true in their team, I’d say that if you don’t get WLB for that lower pay at Microsoft, then it’s time to transfer to a team that has WLB or leave for FAANG where you are actually being paid market rate for having no WLB.
because M is not part of FAANG