Tech Giants Take Their Talent Hunt to Cambridge, UK

https://www.nytimes.com/2018/07/03/technology/cambridge-artificial-intelligence.html

by adventured • 8 years ago

131 270 8 years ago

EliRivers• 8 years ago

The UK could pitch itself as a place rich US tech companies can buy top talent at low price. I have seen some (not many, to be honest) US tech companies open offices in the UK so they can pay half or less for staff, compared to what they'd pay at home. If Brexit goes as badly as it might, the pound could be even cheaper.

ForHackernews• 8 years ago

Why are UK tech salaries so low compared to the US?

cyberpunk0• 8 years ago

Because when tech companies come to places in the us they become gentrified and everything becomes expensive. In most cases tech companies coming to an area has a devastating effect as people who had lived in an area forever are forced out due to the insane spike in cost of living.

justincormack2• 8 years ago

Because outside of financial services, there aren't that many highly profitable companies, Google or Facebook profitability levels are not common in Europe. Salaries have been rising though, and London salaries are twice or more than much of Europe.

petercooper2• 8 years ago

I think there are lots of reasons, both sociological and economical, but my hunch is that demand for the most productive tech employees is lower since it's so easy to lean on American-produced innovations and services rather than build our own in the UK.

Consider that Azure, AWS, Google Cloud Platform, etc. are all huge in the UK, yet most of the work on them is taking place in the US. Ditto for Oracle, Office 365, the Google Suite and even consumer stuff like Craigslist, Reddit or Apple's services (that the UK never home produced something like Reddit continues to boggle my mind). Why pay for the best people in the industry to work in the UK when we can just stand on the shoulders of work being done in the US?

If you look at industries where the UK does take an innovative role like finance or bioinformatics, the salaries seem a lot more competitive, though are still not at US levels due to the UK's lower cost of living I guess.

Balero7• 8 years ago

There are a number of reasons.

Probably the biggest is that the UK doesn't have the number of large tech companies in one place needed to push up wages. ARM is in Cambridge, Rockstar is in Newcastle, Dyson near Bristol. The only exception is in Banking where the salaries are much higher than the UK average (but still lower, as tech is views as second to other roles, not as the primary focus).

Other reasons are that the UK has a better social safety net. That to many people in many places in the uk there is no such thing as an engineer, if you work with computers you work in IT (and can you fix my laptop please?).

There is in many places (especially older companies with non-tech middle managers), also a management problem. You can't pay an engineer more than a (non-technical) middle manager, because the manager is (obviously) more important, as they can tell then engineers what to do. And all the engineers do is what management tells them to, so they're replaceable. This is obviously not a good environment for productive engineering, but explains why some companies see engineers as a cost centre rather than a revenue generating centre.

shanghaiaway2• 8 years ago

UK companies do not produce as much value, hence they are not able to pay as much as FANG.

adav• 8 years ago

Anecdotally, and when compared to America, it could be due to a combination of many factors including:

- More regulation around employee protection

- Excellent talent drawn from less wealthy EU states who may be willing to accept a slightly lower wage than locals

- Lots of STEM graduates from UK universities

- A different work life balance

- Tech skills are not seen as valuable as law/banking/medicine

- A more profit-first rather than growth-first startup mindset

pjc502• 8 years ago

Aren't the high US salaries themselves extremely location-specific? It's more like CA/NY vs rest of world in terms of salaries.

jinder• 8 years ago

I think what most people are missing in these comparisons is that London's tech market is hugely contractor oriented, and so it makes more sense to compare day rates. Finance in London pays typically £500-600 per day for average level frontend and backend work. There's the potential to earn much higher if you're good at what you do.

a_imho4• 8 years ago

Mainland Europe has even lower salaries in a similar timezone.

chrisper2• 8 years ago

Switzerland is doing just fine.

MrBuddyCasino3• 8 years ago

Err no, certainly not. German salaries are at least on par with London, and ~twice as high than the rest of the UK.

slivym• 8 years ago

Lot's of companies do that, but the UK is kind of a strange place to choose to do that. If you want cheap, go hire a team of 10,000 engineers in Penang (I'm looking at you Intel). If you want expensive, choose silicon valley. If you want 2nd tier, take a look at Canada. You can choose the UK, but why? Their time zone means you'll never be able to meet with them at the same time as your Malaysian and Californian offices. They're cheap - but no where near as cheap as the far east. And they've got a metric shit tonne of employment rights, which most US companies not only don't want the cost of, but also disagree with ideologically.

Balero7• 8 years ago

The timezone, whilst often being a negative, can also be a positive. If you need a service that is always up and supported, having three teams (GMT-8, GMT, GMT+8) is one of the best ways to do this. This puts the UK in the perfect place for a company needing this based in California.

Also there is a good overlap for companies based on the east coast to do hand over, which I believe is common in finance.

justincormack2• 8 years ago

The employment rights in the UK are minor compared to most of the rest of Europe, and while you cant fire at will, it is easy to get get people out if you want to.

noir_lord2• 8 years ago

Tech multinationals are almost by definition 24/7 operations.

The UK for an American tech company is a large stable country within 1-2 hours of the timezone of the largest single market in the world and has a shared language and culture.

If you want to sell into Europe then Britain made sense...until the fuckwits voted for leave (yeah I'm bitter, they fucked over everyone my age and under).

walshemj10• 8 years ago

Good education and fully native speakers of English and a society that keeps "engineers and scientists" in their place so cheap also you save a lot on not having to provide heath care.

curiousgal• 8 years ago

That is exactly what every multinational has been doing in the Third World for decades! Software developers in Tunisia, for instance, get paid 5k per year. If the salaries are enough to cover the cost of living then workers will be happy. 100k in SF is the same as 70k in London which is the same as 5k in Tunis.

smnscu• 8 years ago

Have been to our offices in Tunis, can confirm. Shit's grim, apparently their currency devalued 3-4x in the recent years, making everything absolutely dirt cheap, and their salaries worthless.

Friendliest people I've ever seen, though.

supergarfield2• 8 years ago

100k in SF is the same as 70k in London which is the same as 5k in Tunis.

Not really. Only some things are significantly affected by the local cost of living: rent, food, nights out for instance. Sure, they probably make up the majority of your spending, but CoL is almost irrelevant for

- Buying luxuries: a Porsche or an iPhone are nearly the same price everywhere in the world

- Going on vacation

- Savings, if you don't intend to stay where you currently live forever

Depending on your lifestyle, these categories could easily make up most of your income, in which case $5k per year is terrible even if it covers the CoL in Tunis.

angarg122• 8 years ago

As the tech workers land the big salaries, home prices are skyrocketing, and the locals are being squeezed out.

Joke is on them, I'm a new tech immigrant to Cambridge and I still can't buy a house here.

samwillis• 8 years ago

We gave up on trying to buy in Cambridge and moved north to Stamford, its just over an hour on the train (one stop past Peterborough) and about the same by car (if you avoid the worst of the rush hour, will be 45 min with the new road in 2020). Lovely here, much nicer then a villages near Cambridge and about the same time to commute!

cup-of-tea6• 8 years ago

Three hours of my day is worth way more than what Cambridge employers are willing to pay unfortunately.

Doctor_Fegg• 8 years ago

Good choice - Stamford's delightful. (Grew up in Rutland, still very fond of the area.)

cup-of-tea6• 8 years ago

House prices have been skyrocketing for ages already and it's helped by the fact that Cambridge is within commuting distance of London. There's no way your average senior dev could afford to buy a house in Cambridge at this point.

pjmlp2• 8 years ago

Yep and it is affecting the Bristol area as well.

swebs4• 8 years ago

We have the exact same problem in the other Cambridge (Massachusetts).

eftpotrm• 8 years ago

That's been true over very large parts of the country for most of the last 15 years TBH. House prices in the UK are divorced from reality.

elliotpage• 8 years ago

As someone who born and raised in Cambridge the possibility of owning anything larger than a shared shoebox has plummeted into impossibility.

swarnie_4• 8 years ago

I can relate.... I'm just a little further away in Buckinghamshire but the local train can get you to zone 1 in under 30 minutes.

4 x my salary would get me a 2 bed flat if i didn't mind living in a ghetto.

collyw3• 8 years ago

As someone who lived in Cambridge a while ago, Barcelona isn't much different in that regard. I have a theory that its all to do with fiat money, and it took 40 or so years for the effects to filer through.

JoeSmithson• 8 years ago

That's more an effect of the fast train to KGX

Silhouette3• 8 years ago

There are trains actually running to King's Cross now? ducks

But seriously, if you want to know what the housing market in Cambridge is driven by, look at the new things they're building. The "affordable" housing is far beyond anyone doing a "normal" job who just wants to live locally, say a school teacher or a nurse at one of the hospitals. Even those of us lucky enough to work in the relatively well-paid tech sector mostly couldn't afford one of the new luxury flats or town houses that keep springing up near the railway station, some of which have seven-figure asking prices.

For those reading this in the US who might be used to SV wages in tech, earning enough over here to get a seven figure place almost certainly means that either you had a very successful exit already or you have an unusually well-paid gig probably down in London. No-one on anything close to normal salary or freelance rates in tech sectors can get that kind of mortgage, so otherwise if you didn't already own a place that you can trade up from, you're totally locked out of that high-end market. And yet people keep building whole estates of properties like that, and then trickling them onto the market over the next year or two to keep the prices high.

I find it quite depressing that having been entrepreneurial and even modestly successful by any normal standard, we would probably still have made more money if we'd just invested in buy-to-let property in Cambridge instead of starting our first business and then reinvested in growing the property portfolio since. The UK housing market (and our incentives for taking a risk and starting out on your own in business) are messed up.

kdelok• 8 years ago

Agreed - I think the key to owning a house in Cambridge is to already own a house in Cambridge. That and work in the City or buy-to-let.

On the other hand, buying in conjunction with the local housing associations is more feasible, so it's not all doom and gloom.

notahacker4• 8 years ago

There are also several towns and villages commutable into Cambridge with housing which is very affordable by South East UK standards, and certainly for anyone working in tech, even if that means braving horrible traffic on the commute in.

pjc502• 8 years ago

I moved to Edinburgh for this, which has worked well for me; although there's not a huge depth of job market especially in smaller companies. And the thing squeezing out locals in the city centre is .. AirBnB.

arethuza3• 8 years ago

We sold a large flat in the New Town about a year and a half a go and a lot of the people who viewed were "investment" buyers - I must admit I didn't give any thought to what they would actually do with the property once they had bought it.

We sold to a family with young kids who wanted to live there - which I preferred.

angarg122• 8 years ago

According to the recruitment website Hired, the average tech salary in London is $78,000 a year, versus $142,000 in Silicon Valley.

And this is one of the reasons for the brain drain that the mention before. Silicon Valley firms pay significantly more than the competition, and they are still paying almost half of what they do in the US.

It isn't only about money, but it would be naive to deny it's impact on people's decision on where to live and work.

adventured2• 8 years ago

In complete terms it's more like 3x that $78k figure.

The salary would be bad enough. The big US tech companies are nearly all publicly traded. So that $142,000 is really $250,000 or more in total compensation. The UK, and Europe more broadly, not only can't compete with the salaries, they can't compete with the ability to dish vast stock compensation thanks to the immense market caps that Google et al. have. If you're really great at something, Google can trivially give you millions of dollars in stock if it makes sense. What company in Britain can compete with that?

The skeptics will say something about healthcare in the US as a counter. The top 1/4 in the US have easy, fast access to some of the most elite medical care on the planet. And if you're making $142k in salary in the US, your healthcare is entirely paid for.

There are only two strong counters, one is that the quality of life can be very high in parts of wealthy Western Europe, and the other is cultural (preferring one culture over another).

robert_foss• 8 years ago

My personal counter is that I just couldn't morally accept contributing taxes to a nation which:

    - Exploits the poor and non-citizens
    - Overthrows governments and bullies smaller countries
    - Has only the most rudimentary social security system
    - Does not really have a concept of healthy work/life balance. With little time off and none at all for people with newborns.
    - Takes near-zero environmental responsibility
    - Literally spies on the entire population of the rest of the world
    ...

foldr16• 8 years ago

And if you're making $142k in salary in the US, your healthcare is entirely paid for.

Surely there's still copay?

Moodles2• 8 years ago

Not to mention that marginal tax in the UK is 40% income tax for 45k+ (45% over 150k) + 2% national insurance which is actually more marginal tax than SF, the highest taxed state in the US. Of course UK has the NHS fee healthcare, but if you're pulling $200k+ in SF you probably have medical benefits too.

kalkut2• 8 years ago

The top 1/4 in the US have easy, fast access to some of the most elite medical care on the planet. And if you're making $142k in salary in the US, your healthcare is entirely paid for.

There is nothing surprising in the fact that the top 25% earners have access to healthcare. The point of public healthcare is to make sure that the remaining 75% will not get indebted to barely survive.

What would worry an European worker would be :

- What would happen to my (and eventually wife's and kids') access to healthcare if I lose my job ?

- What if I want to start a business ?

- What if I want to go back to college ?

- What if I have to take care of a family member full-time ? Who protects me and this member ?

I am sure US medical care is very elite but what I also see is that a very large part of people who fell into poverty in the US did so because of unexpected health problems that would be taken care of in most European countries.

IshKebab• 8 years ago

Also we get 2-3x more holiday, and sick days don't come from your holiday allowance. And the hours are shorter. I work 40 hours a week for very good pay (for the UK). Previous job was 37.5 hours.

I bet Google's hours are much longer.

walshemj10• 8 years ago

The advantage of the UK's take on stock options is the tax man wont try on tax you on money you never had and their is much less opportunity to get screwed out of stock - you must get the same stock - multi class share listings are not looked on kindly and can get you kicked of the UK indices.

My mate made 125k on 5 years worth of stock options at BT and that was open to all staff - oh ad that's mostly tax free.

eli_gottlieb• 8 years ago

There are only two strong counters, one is that the quality of life can be very high in parts of wealthy Western Europe, and the other is cultural (preferring one culture over another).

I would think the counters would also include:

* Getting to go on vacation ever, at all.

* Weather and closeness to family.

ryandrake2• 8 years ago

And if you're making $142k in salary in the US, your healthcare is entirely paid for

Not even close to true.

I was making about that much and had insurance and we were billed multiple thousands of dollars for a bog standard pregnancy/delivery. Sure, if I was not insured at all, it would have probably been hundreds of thousands--who knows? Anyway, I've never seen a health insurance policy where your health expenses were "entirely paid" for.

Nursie3• 8 years ago

> Silicon Valley firms pay significantly more than the competition,

I'd say another major factor here is that the UK market significantly undervalues talent, compared to the US, Australia and other markets I've heard of. It may be better than continental Europe, but it's pitiful compared to the money in other countries.

Which is why I'm a contractor now, salaries for permanent work in London are not comparable to work in the US, and outside of London they are just plain derisory.

walshemj10• 8 years ago

Very much so though the market is super hot now I just took a job locally on Monday (no godam commute on the shit show that is thames link ) and thought I did well to get 5K bump.

since then I just got pitched a 100,000 K euro Job in Portugal (flat 20% tax!!!!) and a £60K one in London maybe I jumped to soon.

cyclinghacker• 8 years ago

I worked in AU around ten years ago. I don't remember salaries coming anywhere near the UK or US. I'd love to know if things are better now.

I wouldn't say the UK market particularly undervalues talent, in the city at least. Most of my peer group are on a day rate of 800-900 which (assuming you take 5 weeks of holidays) would translate to at least USD 248k gross. Chatting to our traders they are pretty jealous of our 9-5 hours, 2 hour lunch breaks and relaxed dress code.

fgrep4• 8 years ago

people do not think about it rationally. The money you earn in SF is mostly not your money, its the landlord's money. You can work in London, live outside the M25, and have 35 minutes commute time, in a train, and pay reasonably normal rent/mortgage. I am not sure if you can live outside SF and work in SF and spend less than 4 hours commuting eveyday. I've just received two offers one for permie £100k and £700/day for a contract, I'm pretty certain I would be left with more money here that I would in SF even if im on $180k. Being in SF with family/kids is a game over I guess.

dmode2• 8 years ago

This is just not true, I live outside SF and have kids and own a single family home. My pay here has exponentially gone up over the last 5 years, especially if you account for RSUs and so has my wife's. We are also able to change jobs every two years that results in decent pay increases. I also made a ton of money selling my previous home, and sit on a massive equity on my current home. There is a reason things cost a lot here. Because people can afford it.

eddd• 8 years ago

Why would you chase people from Universities who have high salary expectations when you have the internet? It is beyond me. Developers storm remote positions, yet the industry is super slow with adoption.

zavi2• 8 years ago

Because in-person collaboration is more effective.

cup-of-tea6• 8 years ago

Haha, erm... source?

pjmlp2• 8 years ago

Having worked partially remote for about 12 years now, it is more because management believes butts in chairs is a sign of productivity.

sjg007• 8 years ago

Microsoft has been in Cambridge for decades.

justsomedude433• 8 years ago

I wouldn't move to US for $140k from my £40k salary in the UK unless they point a gun at my face and force me to do it. So to each their own I guess.

handbanana3• 8 years ago

Why’s that?

bepotts• 8 years ago

People on the internet love to exaggerate how bad living in the US is.

The US is a big country and there's plenty of places that most people wouldn't like to live (every country has locations like this), but if you're a tech worker, there's no place better in the world to live than in the US. You don't have to live in the Bay Area, you can live in Seattle, New York City, Boston, Los Angeles, or Atlanta. Don't like the city? Okay, there's plenty of affordable suburbs to live in all over the country.

Plus your cost of healthcare will either be free or heavily subsidized, taxes will be lower, you'll be making more money, and the opportunities for career advancement, VC funding (if you want to go the startup route), and opportunities to network will be much greater here.

America is an amazing place to live, whether the internet wants to believe it or not.

swarnie_4• 8 years ago

My guess would be healthcare costs, bay area living costs or the dice you you have to pass every time you encounter a police offer.

pentae• 8 years ago

Except you would't need to, they have local offices.

6ak74rfy2• 8 years ago

I am thinking about moving from US to London. So, I am curious to know why you prefer UK to US despite the salary gap.

Also, do you know how does their healthcare compare?

hacker_92• 8 years ago

For one, our healthcare is free. Though many companies still provide private healthcare as a benefit. Personally I agree with OP, I wouldn't want to live in the US either. Mainly because capitalism has been taken to an ugly extreme and you might get paid more but you also work more etc. Not to mention the tax and tips culture. Of course there are problems here too; it rains a lot more, and every conversation that goes on long enough always ends up as some sort of brexit complaint ...

justsomedude433• 8 years ago

"I am thinking about moving from US to London. So, I am curious to know why you prefer UK to US despite the salary gap."

Because it's not all about the money. People make mistake by comparing salaries on their own which is not correct, you need to compare what's left of your salary after you've afforded the same level of lifestyle.

You might look at $140k as a lot of money and £40k as very little money but you need to put that into perspective. My salary comes with tax deducted and you have to pay someone to do your taxes for you. That's the first difference and it's quite vocal.

I don't mind and honestly prefer to have 40-50% tax taken away from my salary to enjoy certain social benefits which you would need to pay extra for and there are some things that just aren't in the US, like pension. You don't have pension, you have 401k which is a voluntary savings account basically. Besides the state pension that I will get once I retire (and will continue to receive as long as I'm alive), I also get 5% of my gross salary taken away every month and my employer tops it off with another 5%. If nothing else, at least I'm set when I retire and I don't have to worry if I'll have enough money until the day I die after retirement.

Some countries in Europe, much like the one I come from, have half smaller salaries than the UK and I would still take £20k salary over $140k in US because you can't put a price on a 5min commute to work and letting your children play outside without supervision, going for a walk at 11pm without having to worry that something might happen to you, not having ghettos or "bad areas" in your city, being able to go to a hospital and have a surgery without paying anything, sending your kids to university without paying anything... like I said, to each their own. If you only look at money itself and nothing else then yes, $140k in US is much better.

ensiferum• 8 years ago

“How do we stop the A.I. brain drain to the U.S. — or to the U.S. companies anyway?”

Uh.. create an alternative work place with comparable benefits and compensation?

swebs4• 8 years ago

No, no, how do we stop brain drain to US companies while still paying less than half of what those companies pay?

drej• 8 years ago

I used to work in Cambridge, a tech job of sorts. It was swell, the quality of life is great, London really close as well.

There were only two downsides. One, pretty bad public transport and driving was often not an option. Two, very few flats, so you’d mostly share with others in houses.

Last but not least, there is a great divide between the students, the so-called professionals (meaning tech, medical research, aeronautics etc.) and town people. The frictions were commonplace.

vilhelm_s2• 8 years ago

What kind of frictions did you see?

jingleheimer• 8 years ago

It's town vs gown. You have separate areas and generally don't mingle. There is an age difference as well as a cultural and class difference. Much of Cambridge is gated off into colleges that a town person can't go unless escorted by someone connected to the university.

I was in the gown group, but even within this group there are additional degrees of stratification.

scotchmi_st• 8 years ago

I get the style this article is going for, but Cambridge Science Park (and surrounding areas) have quietly been a major hub for tech for at least the last 2-3 decades. Lots of biotech research, but Microsoft Research has been there since as long as I can remember (I went to school around the corner) as well as major offices for Intel, ARM and any other major player you can think of.

If I had to give an answer to the question 'why now?', I would say because of investment, and also Cambridge has really modernised as a city in the last few years. Plus it is a genuinely nice place to live- good schools, you can cycle and walk everywhere, and cars aren't really allowed in the city centre.

lordnacho• 8 years ago

According to the recruitment website Hired, the average tech salary in London is $78,000 a year, versus $142,000 in Silicon Valley.

Does anyone have a like-for-like comparison? What do the FAANGS pay for the same thing in one place or the other? Is Glassdoor reliable for these stats?

I don't think the comparison is so easy, because London has a huge financial tech market which SV probably doesn't. But those incomes might end up in the "finance jobs" column rather than "tech". HFT coders get paid a fair bit, but could reasonably claim to be either.

seanmcdirmid10• 8 years ago

Those incomes enter into the consultant column.

chaostheory• 8 years ago

This is a bit strange that this is news considering a lot of the foundations of the tech industry were created at Cambridge and it's never stopped, with ARM being the most visible example. I'm assuming that average people outside of Europe are not aware of Cambridge's importance. Is it also true of the avg person in Europe as well?

carbine• 8 years ago

Genuinely surprised at how much most people on this thread seem to consider salary as the most important variable when it comes to where you'd want to live.

Relocating TO the US from other countries is often a nightmare, no matter how talented you are.

And I personally care more about how much I like the culture and environment around me after work and on the weekends than how much I'm being paid.

SF is really great, but it's not London.

All that is to say, there's more to it than money. At least for some people.

zeristor• 8 years ago

Strangely the discussions seem to be focused on salaries and the cost of living in the UK.

The article talks about academics being lured away from teaching, which is a problem, I imagine that academics could perhaps guide students in the companies they employed at, like a paid course? Although there's a difference between pure research and getting stuff done.

With all these people working at US companies it creates hubs of knowledge, networks of people, that in turn could spawn new companies, which in the long run is surely a good thing.

Tech Giants Take Their Talent Hunt to Cambridge, UK

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