I telecommuted most of my career. This includes west coast tech companies and large New York City banks. My salary was always the going rate for these locales. If people want to negotiate using your living arrangements, I’m ok with that. But I’m blown away that a company (Facebook, of course) is trying to tie salary to where you live. How does this work, in the real world? If I move to a more expensive neighborhood do I get a raise? Will I get a pay cut if I sell my house and move to a cheaper place, in the same city? This is just another abusive tactic used by abusive employers. Sad thing is they will probably get away with it.
Facebook employees could receive pay cuts as they continue to work from home
Steven A. Guccione 
This strikes me as a huge blunder for Facebook, revealing not just an indifference to the humanity of their people but a fundamental misunderstanding of how to phrase things appropriately and deal with people.
This would have been much better phrased as, “Folks, we hope you can appreciate that times are hard and revenue is down. As a result, we are freezing all pay increases for the foreseeable future. We hope and expect that those of you who take advantage of our ongoing work from home policy will see personal expense savings that will help mitigate the sting of this policy. We value our team and the contributions of all its members, and we thank you for your understanding.”
That still sucks, but not nearly as badly.
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