Pay reduction due to relocation

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After hearing I received the ‘max allowed’ for this year’s merit raise, I actually received nothing. I followed up with my manager who said ES told him I was now well over my pay band for having relocated to the town I grew up in during the pandemic (to be near my aging parents). I hadn’t lived here for 20 years and have been shocked at the sticker price - I pay more for my apt here than in SF (and it’s smaller), drinks are the same, going out is the same, food, etc etc. Just gas and car insurance seems to be slightly cheaper than California. Now my manager is waiting to hear if ES, instead of granting my merit raise, is going to reduce my salary by 30% to get me within the local pay band. I am speechless at this turn of events. Has anyone else had this issue arise??? I am not sure if I’ll move back to SF - no one on my team is based there anymore, so why?!

TC $145k (IC, no RSUs, 7 YOE, Master’s in my field)

Geo A to Geo C (but literally no change in expenses)

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