VMware Remote Workers Who Relocate Get Pay Cut: Report

‘VMware is dedicated to equitable pay for its workforce, not by only race and gender, but also work location or geography,’ says VMware in a statement to CRN regarding the matter.

In the midst of the coronavirus pandemic, VMware employees who choose to become permanent remote workers are receiving a pay cut depending on where they relocate.

According to a report by Bloomberg, employees who worked at VMware’s headquarters in Palo Alto, Calif. that have decided to leave Silicon Valley must accept salary reductions. For example, if an employee leaves for Denver, they will receive an 18 percent pay cut, while moving to San Diego or Los Angeles means an 8 percent salary cut on their annual pay, according to a Bloomberg report that cites people familiar with the matter. However, some employees will see pay raises if they choose to move to a larger or more expensive city.

In a statement to CRN regarding the matter, VMware said the company is dedicated to equitable pay based on several factors including location and geography.

[Related: VMware Partners: ‘AWS Scoops Up’ VMware Cloud On AWS Deals And ‘Pushes You Out’]

“Through our Future of Work initiative, VMware is building a dynamic, global workforce of the future where our people have choice and flexibility to work from any location that accelerates their productivity to deliver the most innovative solutions for our customers,” VMware told CRN. “Our program is designed to empower our employees with the information to help them make decisions should they desire to relocate. VMware is dedicated to equitable pay for its workforce, not by only race and gender, but also work location or geography.”

Rich Lang, senior vice president of human resources for VMware, told Bloomberg that salary adjustments are based on the “cost of labor” depending on the different regional zones and benchmark salary variations among firms competing for its workers. Lang said VMware is being transparent with employees about how relocating will affect their salary.

“We are asking employees to be upfront and honest, because that’s the expectation at VMware, but also the governments require you pay your taxes based on where you work,” Lang said.

In May, the virtualization and hybrid cloud software superstar, which is majority-owned by Dell Technologies, confirmed it has implemented a “number of cost management changes” after an internal memo surfaced stating that the company is conducting a company-wide employee salary freeze as well as temporary salary reductions for top executives, including CEO Pat Gelsinger, due to the uncertainty of the coronavirus pandemic.

“This is a part of a thoughtful and prudent plan designed to address the current uncertainty of the COVID-19 pandemic and the overall economic outlook, while ensuring the company has the skills and talent needed to accelerate growth as the economy stabilizes,” VMware said to CRN at the time.

Last month, VMware also confirmed the company is laying off an undisclosed number of employees. The company declined to provide the specific number of employees being laid off in August.

VMware has approximately 31,000 employees on a global basis.