Companies announce exodus from Silicon Valley

Pamela Cruz. Peninsula 360 Press [P360P].

The COVID-19 pandemic, which has caused a large number of offices of Silicon Valley technology companies to be empty, as well as the rising costs of living in California, are some of the reasons why several companies have begun the exodus from this region.

Although 1938, when Hewlett-Packard was founded outside San Francisco, is considered the beginning of Silicon Valley, the truth is that today there is greater discontent about the high cost of living, the low availability of housing, as well as high levels of crime.

Although it has been mentioned that some of the main competitors in this bay area could be Los Angeles or New York, the state of Texas seems to be attracting the interest of some technology firms, either the city of Houston or in Silicon Hills, outside Austin.

Since 2013 there is talk of strong growth in these areas, with many jobs in the sector commonly known as STEM -Science, Technology, Engineering and Mathematics-, as well as for its successful model of exporting medical services thanks to the Texas Medical Center cluster.

The state has good universities, such as Rice in Houston and the University of Texas at Austin, as well as a tradition of technology companies, as Texas Instrument was founded in Dallas in 1941, just two years after Hewlett-Packard in San Francisco. 

Exodus begins 

In early December, Hewlett Packard Enterprise, which brings together the software and business services activities after the Hewlett-Packard division in 2015, announced that it will move its offices to Houston, which is considered a hard blow in the history of Silicon Valley.

Antonio Neri, president and CEO of the firm, said they have "listened to the team members, who have said they want to spend less time in a physical workplace. And in response to this new future of work we have re-evaluated our real estate strategy.

Their new facility will be a 568,000-square-foot campus in Springwoods Village, north of Houston, which will include a gym and outdoor yoga areas. While the company will maintain an area of innovation in San Jose, it will make Houston its business and employment center.

This announcement was joined by Elon Musk, who, on December 10, announced that he had left his Silicon Valley residence and moved to the state of Texas, due to the "complacency" that has recently taken over the mecca of innovation and technology in the United States.

He also announced his intention to move Tesla Motors' headquarters either to Nevada, where it has a battery factory, or to Texas, where it operates SpaceX. 

Another firm that announced its intention to move a few days ago is Oracle, which after more than forty years in Silicon Valley, said it will move its headquarters from Redwood City to the town of Austin, a fledgling technology hub that is forming in the southern United States.

In a statement the firm explains that "we believe that these movements position us better to grow and give our staff more flexibility about where and how they work". Depending on their position, many employees will be able to choose which office they want to work in. 

In addition to these announcements, the managers of Dropbox and Splunk, Andrew Houston and Douglas Merrit, respectively, have moved to Austin, as has the venture capitalist and co-founder of Palantir, Joe Lonsdale, among others.

People are also leaving the state

According to data from the U.S. Postal Service, between March and November of this year about 90,000 citizens of San Francisco reported a change of address outside the city, most of them to Florida, Nevada and Colorado.

According to the census estimate, the city had 881,500 inhabitants the previous year, so if this loss is confirmed, it would translate into a reduction in population of more than 10 percent, which has not been compensated for by the arrival of new residents.

The real estate portal Zillow mentions that the average price of a house can be around 600 thousand dollars in California, although in cities like Palo Alto or Cupertino, where Apple is based, the price is well over two million dollars.

While data from the Bureau of Economic Analysis, living in California is more expensive than in most U.S. entities, with goods and services costing 15.4 percent more than the national average.