Technology
Bay Area tech's 'layoff surge' has slashed salaries, report says
By Stephen Council,
Tech Reporter
June 26, 2024
Per the study, after speedy compensation growth during the early days of the pandemic and moderate gains in 2022, tech pay dropped an average of 12.1% in 2023, from $207,000 to $182,000. To compile the new data, published in March, WIT compared a November and December survey of 1,600 tech professionals with prior years’ surveys and then combined the findings with recruiting data and public records. The researchers defined a tech worker as someone in a hands-on technical role at any company; the survey didn’t include marketers, salespeople or customer service reps from tech companies.
Workers in the Bay Area received the highest average tech pay of any American metro but also withstood the largest year-over-year drop at 15.25%, according to WIT’s data. (The research group included San Francisco and most South Bay and East Bay population centers in its tally.) The Mercury News first reported the survey.
In the report, WIT cited tech’s “layoff surge” as a key reason for the sectorwide drop in total compensation. The WIT researchers found that compensation for “job switchers” dropped 26% in 2023, while those who could and did stay in their roles saw basically no change. WIT President Paula Ratliff told SFGATE on Tuesday that her group’s data showed that even among scores of layoffs, many tech workers didn’t stay unemployed for long. But their pockets felt the damage.
“We called it the ‘Great Reshuffling,’ because we kept seeing that people would land those jobs so quickly, even in the Bay Area,” Ratliff said. “... The jobs were still being available. They just weren’t paying as lucratively as we saw people paying right after the pandemic.”
Ratliff said that the layoffs seemed to have been harder-hitting for women and people early in their careers, and she suggested it’s because they’re less likely to have extensive networks. Per the study, American tech workers with less than six years of experience saw around 15% pay decreases on average in 2023, while employees further into their careers had smaller losses. Women, whose compensation grew faster than men’s from 2019 to 2022, saw a sharper fall-off last year, according to the data.
Digging into a few of the most popular tech roles, WIT found that project and product managers and straight-up software engineers saw far steeper losses than data, artificial intelligence and machine learning engineers. The latter group, no doubt buoyed by investment in AI and the talent wars at major companies, averaged $234,168 in compensation last year, per the data.
Tech jobs in the real estate, software, retail, ecommerce, construction and consumer products industries saw the largest salary drops year over year, per WIT, while aerospace and defense workers saw the biggest gains. “Defense tech,” as the sector is known, has seen a reawakening in Silicon Valley over the past few years, with billions of dollars in investment flooding in from the Pentagon.
Though cities like Houston, Austin and Phoenix saw salary gains for tech workers in 2023, the pay packages in America’s biggest tech hub still have an eye-watering advantage, according to WIT’s data: The Bay Area tech workers surveyed averaged $252,788 in total compensation.
