What Happens to High Salaries During Downtimes?
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!
No bonuses company-wide.
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.
Incel alert 🚨
Shit theory but would you elaborate? Remember lay off vs getting laid.
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They're typically butchered for meat for the company picnic.
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
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
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
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.
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
You keep the same number but they pay you in Canadian dollar 🇨🇦🇨🇦
Forced unpaid shutdown, lay off, rescinded offers, no bonuses.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.
PMs write the business case for laying off devs. Management takes the recommendations. PMs get promoted.
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.
Basically Uber and Lyft will be shutting down shops. It's very likely that investors won't be putting new money into these companies.