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Protocol Index: Tech salaries could fall 15%

Protocol Index

Good morning! This Monday, a top tech recruiter thinks salaries could fall significantly, ByteDance is all-in on TikTok, and SoftBank's up to its old tricks. Want Index in your inbox each morning? Subscribe here.

What Matters Today

  • Chinese economic data this morning showed encouraging signs of a recovery, with retail sales markedly improved in May. Car sales were up 3.5% year-on-year, helping Tesla hit a new record for monthly car registrations in the country.
  • JD.com is set to start trading in Hong Kong on Wednesday after raising $3.9 billion in its offering last week.
  • Groupon and Oracle report earnings tomorrow. Analysts expect Oracle to report a 3.7% year-on-year revenue decline, according to Koyfin data — paltry compared to the 76% drop expected for Groupon.

Today's News

As of 4:15 a.m. PDT: Nasdaq Futures: -1.68% | Euro 600: -0.83% | Nikkei: -3.47% | Hang Seng: -2.16%




  • Kahoot, which makes software for educational games, raised $28 million at a $1.4 billion valuation.
  • TPG invested $598 million in Jio Platforms, while L Catterton invested $249 million.
  • Sinch acquired ACL Mobile, an Indian communications platform provider, for $70 million.
  • A group of investors, including Tencent, spent $1.1 billion to take Chinese car site Bitauto Holdings private.
  • Ovo, a SoftBank-backed Indonesian fintech, and Dana, an Alibaba-backed Indonesian fintech, are reportedly in talks to merge.


Tech salaries could fall 15%

A lot of people are very excited about the promise of remote work: You can move to the countryside, collecting that massive software engineer paycheck while working from a hammock in your gigantic backyard. Unfortunately, employers have something quite different in mind.

  • "The whole play … is to get people out of the high-cost zones," Stephen Sterett recently told me. Sterett is a managing partner at executive search firm Austin McGregor, focused on filling senior roles at tech startups.
  • While a marketing VP might typically earn around $225,000 in the Bay Area, Sterett said, outside of the region people could expect a 8% to 15% pay cut.
  • Equity is lower outside the Bay Area, too: People elsewhere "aren't as savvy when it comes to equity," Sterett said, which employers use to their advantage to cut the amount on offer. That marketing VP might get 1% to 2% equity participation in the Bay Area, but that could be more like 0.5% to 1% in other parts of the U.S.

The thing tech workers need to remember is that they'll now be competing with talent all over the country — and in some cases, all over the world — many of whom will do the same work for less money.

  • That will have a ripple effect on Bay Area compensation, Sterett thinks. "There is going to be some downward pressure on cash compensation, for sure, on the West Coast," he said.
  • But Big Tech could offset some of that decline: Sterett thinks they'll continue to overpay for the best talent, because "that's just what they do — they buy people."


  • "To double and even triple down when the casino is on fire is a remarkable move, because they may not even be able to cash in their chips later on." — University of Chicago professor John Paul Rollert said Big Tech is taking a risk by investing heavily right now.
  • "The ruling ... has also given companies more confidence to try to merge. Even in cases where before they thought they didn't have a chance, they may now give it a shot." — Antitrust lawyer Sara Ashall said a European court decision could lead to a wave of telecom mergers.
  • "The one bright spot is semiconductors." — Natixis's Trinh Nguyen said chip exports are helping Asian economies right now.
  • "China has been looking at domestic alternatives [to EDA tools] too; it's not been sitting still there ... I don't imagine a situation where SMIC is lights out." — Bain's Velu Sinha said China's SMIC was looking at ways to avoid Huawei supply restrictions, ahead of a planned listing in Shanghai.
  • "People started bashing us because they said, 'Oh you don't have deposits.' It's like, good hell, you can't win with these people." — Nikola founder Trevor Milton thinks it doesn't matter that the 14,000 truck orders it has aren't backed up by cash or contracts.

Closing Bell

SoftBank's simple finances

If you thought SoftBank's finances couldn't get weirder, The Financial Times has a story for you. SoftBank has a stake in a British fintech called Greensill Capital, which provides supply-chain financing to startups — including SoftBank-backed ones. Those loans then go into a bunch of Credit Suisse funds, which lets investors invest in the debt. One such investor is ... SoftBank, which has reportedly put over $500 million into the funds. So, to recap: SoftBank is using its money to loan its companies money via one of its companies. What could possibly go wrong?

Thoughts/feedback/tips? Email me — shakeel@protocol.com — or tips@protocol.com. And subscribe to get Index in your inbox each morning. Thanks for reading, see you tomorrow.

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