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Zuckerberg says employees moving out of Silicon Valley may face pay cuts

Drew Angerer

Facebook CEO Mark Zuckerberg on Thursday said he predicts that 50% of the company’s employees could be working remotely within the next five to 10 years. 

“We’re going to be the most forward-leaning company on remote work at our scale,” Zuckerberg said. 

The company will begin allowing certain employees to work remotely full time, he said. Those employees will have to notify the company if they move to a different location by Jan. 1, 2021. As a result, those employees may have their compensations adjusted based on their new locations, Zuckerberg said. 

“We’ll adjust salary to your location at that point,” said Zuckerberg, citing that this is necessary for taxes and accounting. “There’ll be severe ramifications for people who are not honest about this.”

Zuckerberg announced that Facebook is going to “aggressively” ramp up its hiring of remote workers, and the company is going to take a “measured approach” to opening up permanent remote work positions for existing employees. 

Zuckerberg made his prediction on his weekly live stream with employees, telling them that this decision should help the company improve its employee retention, and it will allow Facebook to hire from talent pools that previously wouldn’t consider moving to big cities to work for the company. Additionally, this decision will allow Facebook to improve the diversity of its workforce and spread economic opportunity across more places.

“When you limit hiring to people who either live in a small number of big cities or are willing to move there, that cuts out a lot of people who live in different communities, different backgrounds or may have different perspectives,” Zuckerberg said. 

Currently, 95% of Facebook’s employees are working remotely, Zuckerberg said. A survey conducted by Facebook found that 50% of employees said they were as productive working from home as they were at the office, Zuckerberg said. Among Facebook employees, 40% said they were extremely, very or somewhat interested in full-time remote work, and among that subset of employees, 75% said they were either pretty confident or they might move to a different city if they could work remotely, Zuckerberg said. 

“It’s somewhat of an unfortunate and unsustainable setup for people to have a lot of these jobs they have to move to a small number of big cities,” Zuckerberg said.  

To start, Facebook will allow existing employees to request permanent remote work if they meet specific criteria. This includes experienced employees, those with strong recent performance, employees on teams that support remote work and employees who get approval from their group leaders, Zuckerberg said. This will not include employees who are recent graduates, Zuckerberg said. 

Facebook is the latest company to announce a decision to continue supporting remote work. This follows similar decisions by companies like Twitter, Square and Shopify

Zuckerberg’s announcement comes as Facebook announced new features for Workplace, the company’s enterprise communication software. Boosted by the coronavirus pandemic, Workplace has grown its base from 3 million paid users in October to 5 million, the company announced on Thursday

Following Zuckerberg’s announcements, Facebook’s share price was up for the second day in a row, up nearly 1%, despite the rest of the market being mostly down. 

Source: CNBC

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