Oracle (ORCL) announced Friday that it has moved its headquarters from Redwood City to Austin, Texas, with the announcement that the coronavirus is significantly accelerating the pace of technology out of California. Elon Musk, CEO of Tesla (TSLA), announced the move just days after he left Los Angeles for Austin.
Other tech giants that have recently left California include Silicon Valley’s leading Hewlett-Packard Enterprise (HPE) and the new public software giant Palan Lanter (PLTR).
For many tech workers, the coronavirus epidemic and the new work of domestic reality have been the catalyst for many business leaders to leave the world’s most populous state, which may not be considered real sky-high real estate prices and taxes.
But this is an exodus that began just before the epidemic. Last year, a study by consulting firm Spectrum Location Solutions found that 660 California companies moved 765 facilities out of state in 2018 and 2019.
‘Drive was crushing the soul’
Jonathan Grichen, co-founder of the Founder Institute, the world’s largest pre-seed startup accelerator, who moved from San Francisco to Aspen, Colorado in May 2019, noted that entrepreneurs and venture capitalists in places like entrepreneur Stein, Portland, Denver, Over the years Portland and Colorado are now due to the higher cost of doing business in Silicon Valley.
“I was tired of spending about three hours every day driving from San Francisco to Palo Alto. The drive was supposed to crush the soul, but if I tried to take public transport it would take longer and cost the same. [My wife and I] Both are outsiders and the biggest advantage of living in the bay area is the close access to many beautiful places like Sonoma and Tahoe. Still, it seemed like the traffic was getting worse with each passing day, so after spending every week in traffic, even on weekends I find it difficult to get it done, ”Grichen added.
There are other reasons to dig Silicon Valley. In an interview with the Wall Street Journal this week, Musk blamed the move on a causal spirit, which he sees as an unethical business environment in California and the fact that a new Tesla factory is being built in Travis County, Texas.
The second richest man in the world gestured Possible move earlier this year As May he Publicly criticized and rejected California’s Stay-at-Home Order, in which California Governor Gavin News responded by removing the threat, claimed that he “does not care about Elon leaving anytime soon.”
According to a 2015 report by the Pacific Research Institute, California has died last when it comes to the most cumbersome regulatory structures for business. California’s relatively low personal income and capital gains tax rates, as well as crowds and sky-high real estate prices, cannot be valued without individual opportunities to hobnob and collaborate, which is why the coronavirus epidemic could accelerate this trend, so more people work remotely. Is.
Keith Rabois, a founding fund partner, announced last month that he would be moving to Miami from the San Francisco Bay Area. “I think San Francisco is just so badly run and managed that it’s impossible to stop here … sort this stuff. “It’s not as clear where people are migrating and if they’ve actually migrated, because everyone works remotely,” Rabeis told a Meridian conference.
One of the pioneers of the internet is trying Steve Case Chip away Selected in Silicon Valley since leaving AOL in 2003. Seventy percent of all venture capital investments go to California, New York and Boston, and cities try to brand themselves as innovation hubs with monks like Silicon Mountain (Denver / Boulder). ), Silicone Prairie (Dallas / Austin), Silicone Peach (Atlanta) and Silicone Op Lot (Salt Lake City). Its mission is to get traction, the epidemic is the reason to work from anywhere.
Texton Gust Kepler, a native of Texton Gust Kepler, who runs a finch company called BlackboxOstX, said he sees a steady stream of Silicon Valley transplants, but predicts high-profile people will bring megaphones to the movement.
“Anywhere the trend work, starting with the coveted downfall, changed a great deal in corporate norms, and certainly influenced some companies to move to Texas. Employers have learned that expensive fees are not required for expensive spaces or campuses for a large percentage of their workers. Furthermore, the employees of these companies realized that they did not have to travel 2 hours a day from affordable housing in their neighboring communities, to the ultra-expensive commercial centers of commerce. Technology for remote workforce already exists. COVID was a beta test, ”he told Yahoo Finance.
The future of California
California’s elected officials argue for their part that emigration has been largely suppressed.
For every company leaving California, many more companies say they have no intention of leaving, California Lieutenant Governor Eleni Kunalkis told Yahoo Finance in an interview this week. And “Bond King” Jeffrey Gundlach, who calls Los Angeles at home, argues that popular destinations may not be the best option in California.
The problems with this destination, such as Texas, Nevada, are that its structure is based on a very small population. They may need to impose income tax. I would prefer to go to a state that is not one of the immigrants, “he said. He said during a webcast For its doubleline total return bond fund.
While the proud Texan entrepreneur Kepler hopes that Texas is the top target for innovations, he suspects Silicon Valley will completely lose its luster.
“I don’t think Silicon Valley will be completely wiped out, but it could suffer significant contractions like many other business macas in the United States.” “Unless you have to work on a shipyard or a field to do business, the need for proximity through technology has changed forever.”
Melody Heham is a West Coast correspondent for Yahoo Finance, covering entrepreneurship, technology and culture. Follow him on Twitter melodyhahm.
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