Facebook, Google, etc. have offices around the world, but that hasn't led them to close any of their US offices. If there were enough equally qualified candidates in these areas that would accept compensation at a fraction of Bay Area salaries, why wouldn't they follow suit?
We already have a majority immigrant workforce, and talent is still scarce as it is. I am originally from the American Midwest growing up within driving distance to a top ranked CS university that attracts diverse students from all over the globe with near perfect standardized test scores, literally contending with the likes of Stanford and MIT.
However, our graduates all leave town afterwards for greener pastures at the usual suspects. We just recently got out first homegrown unicorn startup, and there are plenty of satellite offices for brand name companies here. Still, hardly anybody ever stays.
World class engineering talent abroad wants their golden ticket to the US, in particular, to a handful of specific cities only. The vast majority of my FAANG coworkers are immigrants, for example, and our interview bar is more selective than Harvard in terms of raw acceptance rate. Tech companies are essentially in an arms race for brains, even lobbying for more favorable immigration laws. Surprisingly, none of the people we have hired (and cleared our challenging bar for algorithm interview performance) have any desire to return to their home countries. Meanwhile, this global workforce has not dropped total compensation one iota.
As I mentioned in another comment on this thread, engineer salaries are bimodal. I believe this is because labor demand is bimodal. It sounds the company you are describing has this hiring philosophy: we prefer to hire as many mode 1 engineers as we can for the dollar. However, there are also companies that have a counterparty hiring philosophy: we would rather have a smaller, more mode-2 engineer centric organization than a larger more mode-1 engineer centric organization.
What's more, I've noticed that the small, more deliberately leveraged organizations have a strong bias towards the latter hiring philosophy, because it applies not just to their technology divisions, but to the organization as a whole. In finance, it's the boutiques; in technology, it's the startups. Large companies that are able to maintain mode-2 centric culture exist, but generally only when they have high-profit revenue based on R&D.
> As someone who works in the Midwest USA, I don't see anything but upside for people like myself.
I worked for a large tech company that started going remote before COVID. Once they started pulling out of expensive cities and opening offices in cheaper foreign countries, it became an uphill battle to hire anyone in the United States at all. Why hire a $100K Midwest US engineer when you can hire two good international engineers for the same salary and not have to pay for their health insurance?
There will always be some demand for US engineers and time zones put some limits on outsourcing, but opening the floodgates to full-remote companies means that even engineers in the cheapest US cities are now competing against increasingly qualified engineers who will happily take half the compensation to do the exact same work.