If work from home becomes the standard in software development, and salaries are driven down due to delocation of tech hubs in big cities, how are existing salaries going to be reduced?

I get that new remote only jobs will have lower salaries. What about existing permanent contracts? Will companies just start laying off senior people? Will negotiations take place? Without worker unions, this seems unlikely.

If I look back to how recessions (2008) affected well-off workers from other sectors (construction in Spain, for example), the pattern is clear: layoffs, less projects, less jobs, lower salaries. But I'm not sure that's what's going to happen. IT projects and investment don't seem like they're going to slow down, so there will probably still be demand for tech workers.

Will most of the development be moved off shore, where remote and low cost are norm?