Tech companies, founders, and executives are moving out of Silicon Valley to Texas in an exodus sparked by the COVID-19 pandemic
Back in May, we wrote about tech companies moving out of California to Austin, Texas due to the state’s lockdown rules and poor handling of the stay-at-home order. A couple of months later, Tesla CEO Elon Musk announced Tesla headquarters ‘will move to Texas or Nevada immediately’ after California county health official says the factory can’t reopen.
Then in December 2020, Oracle became the latest in the list of tech companies to relocate out of California. The database giant announced it was moving its headquarters from Silicon Valley to Austin, Texas. Since then, at least a dozen other tech companies have either left or planning to leave the state. In a statement, Oracle spokesperson said,
“Oracle is implementing a more flexible employee work location policy and has changed its Corporate Headquarters from Redwood City, California to Austin, Texas. We believe these moves best position Oracle for growth and provide our personnel with more flexibility about where and how they work.”
When you think the tech companies exodus is finally over, today, former Cisco CEO John Chambers says that his startups are leaving over Silicon Valley. Since the coronavirus pandemic began, tech executives, startup founders, and tech employees of all ranks, who normally are based in Silicon Valley, have been moving out of the city. The ongoing exodus of Silicon Valley is a warning sign for the future of the state,
“We’re in trouble. We’re a state that is taking an entitlement approach, it’s not a good state to do business,” Chambers, who founded JC2 Ventures, said in a CNBC “Squawk Alley” interview. “You’re seeing many companies thinking about leaving and, even worse, none of my start-ups are thinking about coming to California.”
“If California isn’t careful, they’re going to lose their leadership and the jobs created with it,” Chambers added.
Why are tech companies leaving California?
The exodus is due to a lot of factors. First, before the pandemic, tech companies worked from offices. Now, most tech companies are now encouraging their staff to work from home as part of the effort to stop the spread of the coronavirus pandemic. Since they’re not going into an office every day, people are in search of cheaper rent, more space, and lower taxes.
Tesla and Oracle are not the only major companies moving out of California to Texas or other states. Hewlett Packard Enterprise also announced it will relocate its headquarters from San Jose, California, to Houston, Texas. Palantir Technologies, a data analytics software company started by the founder of PayPal Peter Thiel, has also moved its headquarters to Denver, Colorado from Palo Alto, California.