When should I down level myself on purpose at a new company?

It is fine to down-level yourself, and in some cases I'd actually encourage people to do this anyway for very senior roles in order to have less stress and more work/life balance.

However, if you're debating between L4 (mid-level) and L5 (senior), I'd push for the more senior level:

• At many companies, L5 (senior) is a terminal level, so you need to get promoted to that level within X months in order to remain at the company. So coming in at L5 may actually be less stress.
• There are many L5 engineers in Big Tech. So it's not like you'll have a huge burden of leading a 10 person team and charting a year-long roadmap. I know many L5s who have a really chill life without too much responsibility.
• If you're coming in at a large, well regarded company (e.g. Google), they'll usually give you ample time to ramp up. You can do it and perform well! (and Taro is here to help)

It depends a lot on your goals, the company extending the offer, and where you are currently in terms of level.

Since there's not much context, I'll just share some scenarios where you could choose one over the other. Before I do the breakdown, I'm making 2 assumptions:

• L5 = Senior, L4 = Mid-Level - I'm following the leveling standard set by Google
• You are currently an L4 (inferring this from "pushing for an L5 offer")

The Case For L5

• You are already operating at the upper-end of L4 at your current company.
• Your current company is cutting edge, either a FAANG company or a FAANG-equivalent one (Airbnb, Uber, etc).
• You have been L4 for a while (2+ years). This will often happen for SDE 2s at Amazon where the band is very wide and many SDE 2s are already operating at a senior level.
• You care about level and compensation (nothing wrong with this, most of us do).
• Your L5 offer is with Meta, which has a strict up-or-out policy. By starting at L5 (or E5 rather for Meta), you don't need to worry about forced promotion. If you want to learn more about it, check out this thread: "How does up-or-out work and what's the transition generally like for E3 -> E4 -> E5?"

The Case For "Down-Leveling" (Staying At L4)

• You haven't been at L4 for a long time.
• You trust the feedback of your current team and manager, and it's clear from your recent performance reviews that you aren't close to the L5 level.
• Your current company isn't cutting-edge, and it's easy for engineers to get by there.
• Your L5 offer is from a company that's known for pushing its engineers hard. Meta has a reputation for this (making the call tricky as there's also up-or-out) alongside Amazon.
• You have very strict work-life balance needs.
• You don't really care about level and are already very financially stable, able to live quite comfortably with lots of buffer.

At many companies, L5 (senior) is a terminal level, so you need to get promoted to that level within X months in order to remain at the company.

This is actually not true. Meta is literally the only company (that I know of) which really does this. If folks are aware of others, I would love to be enlightened.

All that being said, the top tech companies invest a ton into making sure that engineers especially are properly leveled during the interview. Let's say you absolutely crush the interview for Google and they extend you an L5 offer. This means that a bunch of very smart people thought long and hard about you and decided that you have a 90%+ chance of performing well at this level. At this point, you should probably just take it. I cover this topic more in-depth here: "How can I deal with my imposter syndrome after getting up-leveled?"

Mostly what Rahul said. If your level is L5 or below, it's better to avoid down-leveling. If you can negotiate up-leveling that's even better. If your level is above L5, down-level may help make your ramp-up easier.

The job responsibilities for L3 to L5 are pretty predictable. If you can do it you should be able to consistently do it forever. Down-leveling just means "we doubt you can do it consistently". It doesn't make a lot of sense. The only scenario in it that may make sense is you were promoted recently. They may doubt that you were promoted immaturely. But if you are confident you can do the job consistently you should push back.

The job responsibilities for L6 and beyond can be pretty different across companies. What you succeeded in doing in a previous company might not translate well in a new company. (From a hiring manager's perspective: It's always a high risk to hire an L6+ into the team.) Resetting back to a more predictable L5 (or a lower level that's above L5) makes sense. It gives you time to figure out whether the responsibilities are the ones you expected or had experienced. If not, it gives you time to learn the new responsibilities.