According to statistics from Levels.fyi, a platform that tracks compensation in the IT industry, wages in the technology sector are on the decline. Insider reports that the average salary for a software engineer dropped by almost 9%, a hardware engineer by 7%, a software development manager by 10%, and a product designer by 13% over the course of 2022.

These cuts in pay and bonuses have affected all major companies in the industry. For example, at Meta, managers have been instructed to be more strict in evaluating employee performance, which is used to determine the size of bonuses. The quota for the lowest grade of “needs support” has risen at the company from 7% to 12% to 14.5% to 16.5%. Microsoft has also decreased offers to potential employees by 30%. Snap has delayed annual salary adjustments to align with market and competitor offers.

Executives are not immune to these cuts either. Google, for example, announced reductions in bonuses for senior vice presidents and higher at the end of the year.

Pearl Meyer managing director Alap Shah, who advises technology companies on executive compensation, stated that back in 2021, he heard from IT executives that they had to maintain market-level salaries and bonuses, but it was not financially feasible for their businesses. Shah also notes that as financial conditions change, employee reactions to salary cuts also change. Insider cites the example of Snap, where employees did not object to the delay in salary reviews, and one employee even stated that it was “fair enough.”