Why tech giants are moving from Silicon Valley to Texas

One more. The software specialist Oracle said Friday it was leaving Silicon Valley for Texas, the latest company to date from California.

The group explained in response to a question from Agence France-Presse (AFP) that this decision would be favorable to its growth and would provide “more flexibility to (its) staff on where and how to work”.

“Depending on their role, this means that many of our employees will be able to choose their office location as well as continue to work from home, part time or full time.”

Oracle is moving its headquarters from Redwood Shores, Calif., To Austin, Texas, which has long attracted tech companies but has been experiencing a craze since the start of the Covid-19 crisis.

After Palantir, HP, Tesla …

“Another global giant coming to Texas,” said state governor Greg Abbott in a tweet. Oracle is, in fact, the last big name in American Tech to leave California for this state.

This week, Tesla boss Elon Musk also said he is moving to Texas, where his high-end electric vehicle company will be building a new plant and where his other companies, SpaceX and The Boring Company, will be building a new plant. already have premises.

The entrepreneur had already threatened to leave California in the spring, when local authorities forced his factory to remain closed for several weeks to prevent the spread of Covid-19.

This year, the IT giant HP, the software specialist Palantir and the storage service Dropobox also announced their departure to Texas.

The reasons for these moves are multiple. First of all, the cost of living in California, and particularly in Silicon Valley, poses a problem for employees who are struggling to find housing. For companies, this pressure on prices forces them to increase wages to attract talent.

Cloud pressure

Texas’ tax system is also more favorable for businesses. While many of them claim that taxes are not the cause of these moves, the state of the southern United States has a significant advantage: it does not collect income tax.

The other reason why Texas attracts is the lower cost of land to install the vast servers essential to the development of the cloud, a technology that will probably still relocate to no longer depend on Asia.

Finally, the development of teleworking allows companies to initiate the move without forcing employees who do not wish to leave the west coast. Twitter has set up telework for an indefinite period, allowing the social network to relocate in the long term.