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Stripe, the fast-growing fintech payments company, has an interesting deal for its employees. They could be paid $20,000 to relocate from high-priced cities to lower-cost locations. Sounds good, right? Here’s the catch—the workers who take up the offer will have to take a 10% cut to their compensation.

The Covid-19 pandemic has forced companies to rethink the way people work. Before the virus outbreak, it was understood that the vast majority of employees would work within the confines of a traditional office setting. There were people who worked from home, but it was a relatively smaller amount and many of those still continued to spend at least some days at the office.

To stem the spread of the disease, companies recognized the need to decentralize their staff. Working from home became the new standard. One major corporation after another announced their plans for remote work. As time progressed, it seemed that they started outdoing each other, offering extended remote options until the summer of 2021. Some companies, such as Twitter, provided the chance for staff to work remotely forever.

In light of the challenging economy and uncertainty about the future, executives know that they have to worry about managing their corporate finances. Maintaining large office spaces in cities, such as New York and San Francisco, is extremely expensive and the taxes are astronomical. Having people work from their own homes or in lower-cost cities is an attractive option for the chief financial officers to shave off large expenditures and save money.

In addition to Stripe, other companies have made similar-type offers. VMware—a California-based publicly traded software company that provides cloud computing and virtualization software and services— announced that employees who work remotely will get a pay cut if they move out of Silicon Valley to live in less-costly cities. 

According to Bloomberg, “employees who worked at VMware’s Palo Alto, California, headquarters and go to Denver, for example, must accept an 18% salary reduction. Leaving Silicon Valley for Los Angeles or San Diego means relinquishing 8% of their annual pay.” Rich Lang, VMware’s senior vice president of human resources, offered a positive alternative. When a person relocates and works remotely, they “could get a raise if they chose to move to a larger or more expensive city.”

Facebook CEO Mark Zuckerberg vowed to allow his employees to continue working remotely. Zuckerberg said, “We’re going to be the most forward-leaning company on remote work at our scale.” Employees will have to tell their bosses if they move to a different location. Zuckerberg forewarned his personnel, saying those who flee to lower-cost cities “may have their compensation adjusted based on their new locations.” The chief executive added, “We’ll adjust salary to your location at that point. There’ll be severe ramifications for people who are not honest about this.”

Just as there is heated debate over reopening the economy too quickly, there are contradicting actions of leading corporations that reflect a reticence to fully embracing the work-from-home revolution. Google, Amazon and Facebook have recently leased, built or purchased corporate real estate, bucking the remote movement. They are playing it safe by both offering people the chance to work from home, but also expanding their office footprint—in case the work-from-home trend slowly dissipates.

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