Because salary is not determined by how much profit you make but by the demand of your labour in the market.

Newsflash-- the "market" is becoming less constrained by geography.

Pointless snark aside, this is correct. But it is still constrained by geography and it's not all that surprising that employers would like to constrain it a bit more than it is. So this move makes total sense, and pretending that there is no correlation between your location and what you can command in salary is farcical.

Seemingly not if companies are moving back to in-person. Can't be in person at Amazon in Montana.

Right. So salary will trends towards rural Montana salary not SF or Seattle salary.

Once US employers give up on the idea of office work entirely and start looking into cheap east European developers, you‘ll be in for a world of hurt.

I can‘t deny their expertise and quality of work, and they‘re starting to constantly outbid anyone on work for hire platforms

Why would you think that puts upward rather than downward pressure on wages?

And how do you think that will affect SF and Seattle salaries?

Wouldn't it be just as likely to pay Montana salaries to people even if they choose to live in Silicon Valley? A lot of people arguing for ability to work from anywhere don't realize they are now essentially competing with the entire world, or at least the entire population of engineers in their timezone.

We already know we are competing with workers from all over the world. Go to Bengaluru, India or other IT-centric cities and marvel at how many silicon valley names you see on the skyscrapers, each of which has thousands of workers. This has been the paradigm since at least the early 00s. Remote-first may have accelerated it but it didn't bring it about.

This is a relatively neutral effect because I also have more choices of employers as a result. It's just a merging of labor markets. If anything, remote work is a net positive for everyone involved (and actually, everyone): less wasted time, money and emissions, fewer reasons for everyone to be living all bunched up in expensive cities.

IT workers have been competing with the entire world since the late 90s.

Because the reasonable thing for your employer is to pay less to someone else - someone who gets them even higher profits.

Because your Warsaw coworkers are making the exact same profits for that exact same employer, yet paid much less.

Seeing SV people whine about this is quite offensive, and a little bit racist.

It's not, but it's a corporation not a workers' co-operative.

They'll get someone to do the same thing from Islamabad like Digital Ocean.

Salary is never a function of profits, it’s a function of market rates for the skills you provide. Plenty of developers will make Silicon Valley profits for a company, some will even do it very cheap because they hail from regions where their cost of living is dirt cheap.

Edit: you can downvote me all you want, doesn’t make it less true.