California exodus? Software giant Oracle becomes latest Silicon Valley firm to move its HQ from California and relocate it to Texas
Oracle has become the latest Silicon Valley firm to move its corporate headquarters from California, and relocate it to the Lone Star State of Texas.
The move is another blow for Silicon Valley, as Oracle is considered a tech veteran of the San Francisco area, having established its headquarters in Redwood City since it was founded back in 1977.
Now Oracle is to move its headquarters from Redwood City to Austin, Texas, CNN reported, joining a number of other firms.
Last week the world’s second richest man, Elon Musk, announced he had left California after he had sold his Bel Air homes earlier this year.
Musk is now living in Texas.
Musk had also threatened in May this year to move the Tesla factory out of California altogether, to Texas or Nevada, after clashing with officials in Alameda County over the re-opening of Tesla’s factory during the first Californian Covid-19 lockdown.
His threat to pull the world’s most valuable carmaker out of California was not realised, after Musk was allowed to re-open the Fremont factory early.
That said, Tesla is Tesla is building a new plant near Austin.
Meanwhile Hewlett-Packard Enterprise (HPE), one of the founding fathers of California’s tech homeland of Silicon Valley, also recently revealed it was leaving the ‘golden state’ and moving its headquarters to Texas.
HPE was a real founding father of Silicon Valley, as it was created in the 2015 split of tech veteran Hewlett-Packard Co, which was founded in 1939 in a Palo Alto garage.
A number of other firms have already left the San Francisco Bay Area, including data-mining provider Palantir Technologies, which moved to Denver from Palo Alto.
E-cigarette maker Juul Labs also relocated to Washington from San Francisco, and Charles Schwab said last year its headquarters will move from San Francisco to Westlake, Texas.
Texas is already home for other tech firms such as Advanced Micro Devices (AMD), and Dell, among others.
Yet Oracle is a household name in Silicon Valley, and it should be noted that the San Francisco Giants play at Oracle Park, and the company’s Redwood City campus is well known for its cylindrical buildings.
“We believe these moves best position Oracle for growth and provide our personnel with more flexibility about where and how they work,” spokesperson Deborah Hellinger told CNN Business. “We will continue to support major hubs for Oracle around the world, including those in the United States such as Redwood Shores, Austin, Santa Monica, Seattle, Denver, Orlando and Burlington, Mass. among others, and we expect to add other locations over time.”
Oracle opened its campus in Austin in 2018.
And its move to the Lone Star State was welcomed by Texas Govenor Greg Abbott.
“BREAKING: Oracle just announced they have moved their Headquarters to Austin,” he tweeted. “Texas is truly the land of business, jobs, and opportunity. We will continue to attract the very best.
Reasons for leaving
But why does it seem that tech firms are leaving California for other US states?
Well, the global Coronavirus pandemic could be a factor, after people began working from home, sometimes out of state.
And tech firms in particular have committed to allowing staff to permanently work from home, even after the pandemic ends.
But maybe the real truth why firms are relocating from California, is down to economics.
California despite its ‘Golden State’ nickname, has problems. Not least of which is its very high cost of living (i.e notoriously expensive house prices) and commuting difficulties.
And there is frustrations with the governance of some cities and the state itself.
Musk resorted to legal measures against Alameda County officials, amid criticism of California’s response to the Covid-19 pandemic and its tough restrictions.
Another factor is that California also has a high personal income tax rate, while US States such as Florida and Texas have none.