It might also be related to equity. I was laid off and went from a mature startup to an earlier stage startup, and on paper my TC dropped by 50%. But neither company is public yet, so who tf knows what either company will be worth at the point either of them IPO. My base pay went up by about 5%.
So I guess depending exactly on the specifics, "my TC dropped by 50%" might not really be a very meaningful statement without more context.
In this case, the drop is literally 50% in W2 income, as I went from a public company with RSUs to a startup. In the previous job salary was higher and RSUs were a decent amount, even after stocks tanking. Startup equity is decent, but that's more of a lottery ticket than anything else.
> Only in tech would someone casually take a 50% pay cut without it absolutely destroying their life.
That's usually because so much of the total comp is from options/RSUs. You can take a new job that pays more in base pay but take a huge cut because it's a startup (so the option are worth nothing on paper today) vs. a public company with RSUs that have value on the open market.
Or, as the current market is showing, you could take a huge cut in pay even while staying on the same role, simply because the RSUs are suddenly underwater.
My base salary has been on a slow but steady increase for decades. But my total comp has taken wild swings up and down. It's an industry where pay is very unpredictable, due to most of it being in options/RSUs.
Maybe it won't literally destroy their life--and I doubt that's what the parent actually meant, either--but even this ~25% pay cut would greatly affect their life. It's not the nature of life for most people to live greatly below their means, especially over time.
I can attest to the pay cut being impactful. With a teen in private school, the cut means things will be comfortable, but we're dialing back eating out, canceling a planned trip to Europe, etc.
So I guess depending exactly on the specifics, "my TC dropped by 50%" might not really be a very meaningful statement without more context.