On Friday, Oracle, one of the largest computer technology companies in the world, announced that they would move their headquarters from Redwood City in the Bay Area to Austin, Texas.
Oracle’s move is only the latest such move of tech companies leaving the Bay Area for other states such as Colorado, Florida, or Texas. In the last 10 days, HP Enterprise and tech leader Elon Musk have also announced moves to Texas in favor of more tax-friendly and business-friendly environments.
“Oracle is implementing a more flexible employee work location policy and has changed its Corporate Headquarters from Redwood City, California to Austin, Texas,” Oracle said in their SEC filing. “We believe these moves best position Oracle for growth and provide our personnel with more flexibility about where and how they work. Depending on their role, this means that many of our employees can choose their office location as well as continue to work from home part-time or all of the time. In addition, we will continue to support major hubs for Oracle around the world, including those in the United States such as Redwood City, Austin, Santa Monica, Seattle, Denver, Orlando and Burlington, among others, and we expect to add other locations over time. By implementing a more modern approach to work, we expect to further improve our employees’ quality of life and quality of output.”
A statement by Oracle on Friday further confirmed the move, noting that “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.”
Governor Greg Abbott of Texas also tweeted a confirmation of the move.
BREAKING: Oracle just announced they have moved their Headquarters to Austin.
Texas is truly the land of business, jobs, and opportunity.
We will continue to attract the very best.
— Greg Abbott (@GregAbbott_TX) December 11, 2020
Oracle, founded in 1977 in Santa Clara, has been based in Redwood City since 1989. While the company is expected to still have many offices and a large portion of its employees working in California, the headquarters itself will remove another major tax base for the Bay Area and the state as a whole.
“While it’s not leading to a lot of job loss, especially with remote work being emphasized as not going anywhere, this is a real blow,” explained San Francisco-based tech lawyer David Singth to the Globe. “Oracle gave a lot to San Mateo County and California. Even with the campus still serving as a hub, that’s a lot of money walking out the door.
“You also have to notice, that besides for a few exceptions, this is really only happening to companies in the Bay Area. Southern California has a lot more established and integrated companies there. A lot of residents there see it all simply more as a “sunshine tax.” Plus there are not many real “based” companies there as much as they have huge regional presences, which has protected them since after WWII when most West Coast bases for companies moved from San Francisco to Los Angeles. San Diego and the Inland Empire benefit from this too.”
“San Francisco, Oakland, San Jose, and all around here, it’s all based largely on start-ups that can move in or out on a moments notice. Even companies like Oracle that have been around for decades, it’s not ingrained like Coca-Cola in Atlanta or GM in Detroit. So they can pack up and go to other tech hubs. Silicon Valley got a bunch in the 80’s and 90’s from companies moving out of Texas, especially after the dot com bust, but now it’s reversing because of high taxes, more and more regulations that are squeezing companies, and now, a release of a need for many offices because of remote work.”
“It is bad for California as a whole because of the taxes and policies, but the media has to be more specific about it. SoCal isn’t losing that much. In fact, Some Bay area residents have moved to the LA area because it’s cheaper if you were looking for something completely boggling today. It’s kept the housing market strong there too. No, we have to identify this as a Bay Area problem that has been hurting California.”
“You can even look at this politically. Every region of California has significant, sometimes majority, Republican leanings, which often means more pro-business stances. Even Southern California what with Orange County and the Desert areas. But not the Bay Area, and by extension, Silicon Valley. They relied on tech to back some of their policies, and now it’s hurting them, and because of state taxes and things, the state in turn.”
“Oracle is just the latest symptom of that.”
Other Bay Area tech companies are currently mulling over moves out of California for 2021 and may announce moves in upcoming SEC filings.