Silicon Valley is an amazing tech hub that gives companies and individuals opportunities to thrive. With over 2,000 tech firms and hundreds of thousands of software and hardware engineers, there is a lot of healthy competition in the Valley. Tech companies from around the United States use Silicon Valley firms as the yardstick of their companies for good reason. However, no other city can pay workers like Silicon Valley. Their average yearly payout of $155,000 is way more than the national average. How did Silicon Valley become so prominent in the tech industry? 

The Origin Story 

About 50 years ago, many prominent companies established their base in Silicon Valley. Most of these companies dealt with computer chips and they decided to set base in the San Francisco Bay Area for reasons that aren't clear. In 1971, Don Hoefler, a respected journalist, wrote an article about how chip manufacturers were flooding the Bay area. Since these companies used silicon to make their computer chips, it was fitting that Hoefler referred to the region as "Silicon Valley". The name stuck and the number of tech firms in the Valley continued to grow.

As the years went by, different types of tech firms set roots in the Valley. It wasn't just a hub for computer chip businesses. Different types of tech companies have their headquarters in Silicon Valley and this includes titans in the industry like Google, Apple, Facebook, and Twitter. Even Amazon, which has its headquarters in Washington, has a branch in the San Francisco Bay Area. And, the world took notice - cities across the country, and nations across the globe, have developed their own variants (from "Silicon Alley" in New York CIty, to "Yabacon Valley" in Nigeria).

Covid-19, Salary Cuts, and Everything In Between 

Since Silicon Valley is rich in tech companies and talent, it is one of the most technologically inspiring places in the world. If you're looking for a push to kick start your career in the tech world, you should try the Valley. Unfortunately, it also happens to be the second most expensive place to stay in the United States and the most expensive city in California. The tech workers, however high their salaries, are now tired of the ever-rising cost of living in the Valley. 

Over the last five years, a significant number of people have left Silicon Valley for cheaper states. This year, however, most of the people who have opted for relocation are tech workers. They decided to take advantage of a rare opportunity that has been presented to them by the Covid-19 pandemic. Almost every tech worker in the Valley has been working from home since social distancing policies were put in place. Some companies have said that this arrangement will continue even after the virus has been eliminated. Adding to that, upskilling is here: people across the country are adding new skills, particularly technical, are taking advantage of programs to bulk up their skillsets.

Even if tech workers can complete their tasks from anywhere in the world, companies aren't ready to release them from the Valley just yet. Most of these companies have threatened to adjust the salaries of relocating tech workers to meet the standard of living in their new homes. Some companies have said that the percentage removed would be fixed across the board while others claim they will reduce or increase the percentage depending on the location. So, while those moving to Austin might experience a 10 percent salary cut, those moving to Denver will have to let go of 18 percent of their annual income. 

The threat of salary cuts has led to a lot of tension between companies and their workers. Even if these tech companies have been known to give their workers more unconventional benefits than other firms in the past, they are not willing to stand back and let workers who relocate continue to earn like those who stay. Most of these companies hope that the salary slashes will convince the web designers, coders, web developers, and other software engineers to stay put. However, some of these workers aren't ready to accept salary cuts while some others are willing to make the sacrifice. This is especially so when relocating will bring them closer to family and friends. 

The Bottom Line 

The delicate balance between tech companies and their champions is at the risk of being thrown out of whack by the Covid-19 relocations. If companies follow through with their threats, it might affect tech salaries in Silicon Valley forever. It's not clear how the tech community that isn't relocating will react to the changes. Will they stand in solidarity with fellow workers or will they back off because they are not directly affected?