Google layoffs: The company plans to set up a new team in Munich, Germany which would act as “cheaper” labour, the report claimed.
Cheaper labour in the most expensive town in a country that is well known for high labour costs?
Compared to Valley workers, Germans are still cheap. 100k is a very very good salary over here.
When you have a much better social safety net, work-life balance and in general can expect to be treated like a human and not a work-battery to be used up and discarded, people are satisfied with much less money.
Should they maybe instead just try that in the US? Nah, of course not.
Yeah, but you still have to pay social taxes on top for every worker. That’s why salary and labour cost are two different things. And boy is it a difference in Germany.
And as far as I’ve been led to believe, workers in the USA will be bullied into not taking any time off. Germans will take their entitled holidays and use sick leave when they are sick.
Compared to Valley workers, Germans are still cheap.
So is West Virginia or Oklahoma.
True, but you also need to get enough people with the right skills/knowledge who want to live in West Virginia or Oklahoma when those same skills and knowledge likely make them highly employable in markets with more amenities and greater job opportunities without needing to uproot their life and move to a new town/city when the time comes to get a job with a new company.
Even doubling the salary is far less than what you’d pay in the US, and as a rule of thumb, German labour, including all the indirect costs, is about twice the gross salary.
Could easily be that they have a bunch of people in Munich they can not fire since German labour laws are at least compared to a lot of places not that bad and they have to come up with some work for them. So having them work on this is still cheaper then having the people in the valley plus “useless” people in Munich.
You know where there is also cheaper labor? Other places in the US that are not in Bay Area CA.
https://www.levels.fyi/t/software-engineer/levels/senior/locations/san-francisco-bay-area
vs
https://www.levels.fyi/t/software-engineer/levels/senior/locations/munich-metro-region
Even if you assume that additional labour costs are a bit higher in Germany, there’s no way on earth that it could explain the difference of the Bay Area-median being over 3 times higher.
