But that is not new. Tech always had overseas sweatshops. India, Latin America, Eastern Europe come to mind.
Not true at all. We are in the same regime as the pre 2008 rate response. We are below the late 90s boom times.
So you’d need some other explanation other than bare rates.
You see, it’s of critical importance that Santa Clara valley retain the character of a quaint mid 1960s town of single level shops and tract houses. Where jimmy can ride his Big Wheel in the Cul De Sac.
But back then, the Engineering Manager or Product Manager would remain in the US.
Now even Engineering and Product leadership is being outsourced as well, which makes it easier to enforce standards.
But after the COVID layoffs happened, impacted H1B, EB1/2, and O1 visa holders returned to their home countries, and then got rehired by the same employers but for $60k-130k TC (depending on country).
A lot of mid-late career product and engineering leadership was laid of in 2020-21, and those guys have now founded the new generation of foreign offices.
The US is expensive, so offshore. Offshore projects are more expensive because they never work, so come back to the US.
I've lived it twice now. We’re in the middle of my third cycle.
In 2006 the Indians would randomly cut out, couldn't be on video (phone only) and had major language barriers, and they would join in their evening.
Now in 2024 you're on their schedule. Believe me, those people are not staying up late for your 3pm call. Wake up at 5am every day to keep your job, you have 3-4 hours to work with them.
The churn is real and any offshoring hotbed ends up with a lot of competing between big companies for talent which then drives the prices up and motivates people to jump companies more.
I've been employing eastern European IT folks since the early 00's as I've founded/worked for remote only companies since the late 90's. We were ahead of the game here, and anyone we hired was not treated like a sweatshop worker. They were hired and promoted like any hire we made in the US and were simply called an employee. The talent level was same or better than the US talent level for 1/10th of the cost, especially at the mid-tier/career level.
The largest issue was timezones, but if you needed to staff a 24x7 highly skilled ops team - this was one effective way to get a great head start doing so. Plus it was relatively easy getting folks to work odd hours if you were paying double local salaries.
Since the pandemic things have entirely shifted. It used to be large companies/enterprises would offshore to sweatshop style outsourcing companies. They had a hard time competing with us since the work and responsibility simply did not attract the best candidates. We could hire directly out of local university pipelines and be extremely picky in only taking the top 1% of candidates due to this. After the pandemic this totally changed to these large companies now competing on salary at levels we no longer found competitive. We simply no longer enjoy the strategic advantage of having an untapped low-cost highly skilled labor pool in these areas any longer. Large companies have more or less adopted our model.
It's now not uncommon to have entire teams headed up by a highly competent senior VP or C level local leader who reports directly to US upper level management. They are included in all business decisions as anyone in the US would be at their level, and performance is similar to any US team.
I have always (and even written a few times on HN about the subject) thought highly compensated US engineers were being exceedingly short-sighted in their demands for WFO since this was always going to be the outcome in the end. Once you can hire someone in the midwest US, it's not really a huge leap to realizing you can do the same 2500 miles away in a low cost country. There are still tons of labor arbitrage opportunities left in the world and the story that there is no local technical talent in these places is utterly false. It's always been a management problem.
Over time it will even out - and it has quite a bit. Salaries are now maybe 1/3 to 1/2 US salaries at the same talent level, so it still has a long way to go in my opinion. You are only seeing the start of many companies building up long-term strategic plans in these regions - these things take years to decades to be fully realized.
Most US WFH engineers will be competing on salary/skillsets in a world market within their lifetimes regardless of cost of living differences. The writing is on the wall, and I personally believe the die has been cast at this point.