SAN FRANCISCO (KRON) — The Golden State has long been an epicenter of entrepreneurship — but that reputation has been under threat since the COVID-19 pandemic, when a host of economic and social forces came to a head and drove businesses make the decision to pack up and leave.
A 2021 report from Stanford University’s Hoover Institution in August 2021 found that 74 corporate offices moved out of California in the first six months of the year alone, in addition to 64 companies that moved in 2020.
Bay Area counties accounted for five of the top 10 counties that saw headquarters migrate, with San Francisco leading the way.
Who has left?
Tesla Motors: From Palo Alto to Austin, Texas — No discussion of companies leaving California would be complete without mentioning Tesla, of course. The company officially moved to the Lone Star State in December 2021, after CEO Elon Musk clashed with Alameda County health officials over COVID-19 rules during the initial lockdown.
“California has been winning for a long time, and I think they take that for granted,” Musk said when announcing the change.
Musk also moved his personal residence to Texas, which has no state income tax.
However, it looks like Musk isn’t done with California, as the mogul is looking to buy San Francisco-based Twitter.
Oracle: Redwood City in Austin, TX — Oracle, namesake of the San Francisco Giants baseball stadium and former namesake of the arena the Golden State Warriors called home, announced its move in December 2020.
Executive Chairman Larry Ellison and Chief Executive Safra Catz were former President Donald Trump’s top supporters, Bloomberg reported, and business leaders increasingly felt out of step with modern Silicon Valley. Executives at the world’s third-largest software company had also moved its annual conference, OpenWorld, from San Francisco to Las Vegas, and the company was trying to build a younger, cheaper workforce.
Hewlett Packard Enterprise: San Jose to Spring, TX — Hewlett Packard Enterprise moved to the Lone Star State the same month, with its move announced by Governor Gregg Abbot (R), as KRON4 reported at the time.
“As we look to the future, our business needs, cost savings opportunities, and team member preferences for the future of work, we are excited to relocate HPE’s headquarters to the Houston area,” CEO Antonio Neri said at the time. “Houston is an attractive market to recruit and retain diverse future talent and where we are currently building a new state-of-the-art campus. We look forward to continuing to expand our strong market presence. »
Charles Schwab Corp. : from San Francisco to Westlake, Texas — The financial services company merged with TD Ameritrade in 2020, resulting in the company’s headquarters moving to Westlake, a suburb of Fort Worth. The move was official on January 1, 2021.
Palantir Technologies: From Palo Alto to Denver, Colorado — They’re not all moving to Texas! Palantir Technologies has decided to move a mile high to Denver. The analytics company, whose original clients were in the US intelligence community, was co-founded by PayPal’s Peter Thiel. CEO Alex Karp had said he was opposed to Silicon Valley’s “growing intolerance and monoculture,” according to Axios.
Stanford researchers found that the regulatory climate and taxes were the main reasons companies chose to make the leap east. Of all US states, CEOs ranked California’s tax and regulatory policies the worst, including a total of 518 state agencies, boards and commissions.
“Sacramento lawmakers are continually enacting laws that extend civil liability to corporations and
landowners,” the report said, adding that another factor is that workers in California also need more money than workers in other states.
“California employees often have (or demand) high salaries to cope with the high cost of living, excessive housing prices, high tax rates, expensive utilities and, in some cases, payments for private schools to avoid failing public school systems.” the researchers said. “For an employer, labor costs are higher than elsewhere when comparing charges that include not only wages and salaries, but also employer-paid benefits and benefits. ”
Texas is considered the most entrepreneur-friendly state, and California ranks 49th out of 50, according to the study.