People often do change jobs within Google/Alphabet after getting promoted. It's a signal that you're doing a good job, as verified by a promotion committee, and hiring managers will often look at a recent promotion as a signal that someone is a high-performer. But there are lots of folks who don't change jobs after a promotion (especially if you're happy with what you're doing) - it's an opportunity to keep doing what you're doing, just more of the same, with official recognition that you've been doing a good job.
1. Level 3 = SWE I - New Grad (Bachelors/Masters). Level 4 = SWE II (Newly minted PhDs start here). Level 5 = Senior SWE. Level 6 = Staff SWE. Level 7 = Senior Staff SWE. Level 8 = Principal SWE / Director.
2. This is not strictly true; a high-performer at Level N may make just as much as a low- or average-performer at Level N+1. But in practice you start to hit salary caps, and sustaining very high performance at Level N may be more difficult than sustaining average performance at Level N+1.
For people outside the San Francisco and Silicon Valley bubble which are confused by this, it may be worth noting that promotion here does not need mean getting a new job. Everyone are not constantly getting new jobs.
“Promotion” here means internal, magic Google-points and seem to work much like Chinese social credit.
Source: answer by Googler here on HN when I was confused about this very same thing.
https://news.ycombinator.com/item?id=18575875