On December 1st, Hewlett-Packard–which has been headquartered in Silicon Valley since 1939–announced that its corporate headquarters would move to Houston. On May 9, Elon Musk announced that Tesla was moving its headquarters to “either Texas or Nevada,” but on December 7, he revealed that he personally had moved to Austin. On December 11, Oracle announced that it was also moving its headquarters to Austin.
Companies have been migrating from California to Texas for many years, but I don’t think three such large companies have all made such announcements in such a short time. Hewlett-Packard is listed on the Fortune 500 twice, one as HP (which makes office products) and one as Hewlett-Packard Enterprise (which runs server farms). Combining them would make HP #35 on the list, right behind Dell, which is already headquartered in Texas.
Even before moving its headquarters, Hewlett-Packard had more employees in Houston than any other city. This reflects past trends where Silicon Valley companies kept their highest-paid workers in San Jose but built their factories in other cities where housing was more affordable. Apparently, California taxes and housing prices have now gotten too high even for Silicon Valley executives.
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This irony doesn’t apply to HP, Oracle, or other companies moving to Texas. In HP’s case, the irony is that the Packard Foundation, one of the largest foundations in the country, gives money to environmental groups that support the urban-growth boundaries that have made Silicon Valley housing so expensive. That’s something like the irony of the Rockefeller foundations and Pew Charitable Trusts giving money to anti-fossil-fuel groups, since HP doesn’t have any more say over the Packard Foundation than Exxon has a say in how the Rockefeller foundations distribute their funds.
Before these companies moved, more Fortune 500 companies were already headquartered in Texas than California: 50 vs. 49. If a few more companies move to Texas, it could take the top spot from New York, which had 58 Fortune 500 headquarters in 2019.
That could happen, though some companies might be fleeing something other than taxes and regulation. In October, only 10 percent of the one million office workers who normally work in Manhattan were still working in offices and office vacancy rates were the highest since 2009. Marketwatch reports that the commercial property market in New York City is tanking so badly that office building owners have proposed to convert a million square feet of offices to residences. We won’t know for a couple of years how this will affect companies in the long term, but my bet would be that New York will lose a few headquarters to Texas, North Carolina, or other lower density and less regulated states.
Google and Facebook are coming under the normal government antitrust assault, when the big get too big. And Google and Facebook are pretty big in pushing the bad governance of the politicians in the state of California and Biden’s Deep State return in DC. The key to the current California political power structure is big tech combined with imported heavily government dependent people as well as the usual public employee unions. The loss of big tech might help unravel this bad cocktail represented by California’s current political power structure.
Welcome to Texas, Leave your politics at the border.
No one should be surprised to see Tesla shifting manufacturing away from California. Cali’s a tough place for that for manufacturing in high volumes. For that, you need to be close to your suppliers. And they’re in the midwest and southeast.
Moving manufacturing is one thing, moving the HQ is another. They’re making a statement in doing that they believe they’ll be able to retain and attract the talent they need to win.
And if Tesla can do that with Texas, how long before Space X moves to Florida’s Space Coast?
BTW, you’ll be surprised to see the uber progressives, the ones that call not allowing NONcitizens to vote “apartheid”… they’ve started in with their “don’t let the door hit you on the ass” talk for Elon Musk.
A very specific problem California is facing right now is that companies like Google and Facebook aren’t growth companies any longer. In tech, they’re GM and Ford in the 1960s…. maybe even 1970s.
That is Silicon Valley may be on it’s way to being the next Detroit…. or maybe more like 2 1/2 Detroits? Oakland is already one of the 10 most violent cities in the US. These are cities with latin america level violence. Nasty stuff.
San Jose’s more violent than El Paso, a border city that deals with violence spilling over from Mexican cartels literal wars to control smuggling routes. And San Francisco is more violent than Miami. Miami, the only Latin American city on the US continent with a ginormous wealth gap + violence…. San Fran’s already worse than that.
The problem ith these things is that they create feedback loops. The more jobs that shift + leave, the more people left behind are forced to commit cimres – to hustle – to make ends meet. And the more crime occus, the more people want to leave + the more likely jobs will leave.
@prk166 El Paso is one of the safest mid-sized cities in the USA. Check your stats and your facts before you spew trash about my hometown.
https://gov.texas.gov/travel-texas/post/el-paso-lands-at-5-on-advisorsmith-safest-large-us-city-list
My family left the Bay Area in 2000, not for Texas but for Connecticut. It was obviously not taxes, but the fact that my Dad had an extra 3 hours in a day to spend with his family instead of behind the wheel of his Nissan Altima.
Exactly. The bay area has not bothered increasing road capacity like fly over country has.