People just have different preferences.
I think what we’re seeing right now is a significant expansion of remote roles. Previously if you worked remote, chances are it was a lesser job than you could get in the big tech hubs. Now the quality and quantity of remote work jobs has significantly increased.
As a result, there will be a big shuffle as a lot of people who previously would have preferred remote but couldn’t find an actual remote job they wanted soak up the new opportunities.
As for the space they leave behind, there are some people who have been hungry for a taste of Silicon Valley in-office life who will happily take those jobs, as well as TONS of tech workers already settled in the Bay Area but working at smaller companies who might jump at a chance to move into FAANG.
The question is just one of supply, demand, and market-clearing prices.
If FAANG collectively decide they want everyone back in the office and after all the turnover they struggle to replace the people they lost, then they’ll have to raise pay to compensate. But they have plenty of room to raise pay further if needed, so there’s no real reason to think they can’t fill up those roles.
The bigger impact is on startup formation and any other smaller business that doesn’t have the budget room to compete. I think that is increasingly being priced out of the Bay Area, almost exclusively because of housing shortage, which does not bode well for the long-term. But we’ll see.
As to your point on the cultural and institutional knowledge impacts of said turnover… I know it sounds crazy but I don’t think they care. So long as you can survive the turnover, it’s often easier, faster, and less impactful to just “rip off the bandaid.” When you try to drag out a transition you end up with a lot of people unhappy and grumbling internally, but who don’t leave yet. Those people kill morale, and letting them go is often one of the best things that can happen to the team’s productivity. So yeah, it hurts, but if you know that you’re going to lose a survivable percentage of your team due to some policy change, it’s often better to just get it over with quickly than to let it drag out. You see this all the time with companies offering enhanced severance packages, exit bonuses etc. when they need to make a big change.