Oracle and Hewlett Packard have joined the list of companies that have decided to leave Silicon Valley, seriously threatening the beating heart of the tech world since the 1930s.
In this report, published by the British newspaper, The Independent, writer Graeme Massey says that Silicon Valley's position as a center for the technology industry has been shaken after suffering a number of setbacks in recent weeks in light of the Corona crisis, as a group of small companies decided to leave North California and the establishment of new headquarters in Texas.
Although the giants "Facebook", "Apple" and "Google" (Google) have not decided to leave, a number of pioneers, long-standing companies and venture capitalists are on their way to leaving Silicon Valley.
Notable companies leaving California
And the giant "Oracle" company, which last year signed a 20-year sponsorship deal with the "San Francisco Giants" baseball team worth $ 180 million, to turn its name into "Oracle Park", announced that it would move from California to Austin, the capital of Texas.
Company spokeswoman, Deborah Hillinger, told CNN, "We believe that this step is beneficial for Oracle to achieve growth and provide more flexibility for our employees."
For its part, the prestigious "Hewlett-Packard" organization in Silicon Valley announced that it will move its headquarters to Houston, Texas.
Earlier this month, Elon Musk, founder of Tesla, who lives in Los Angeles, announced that the company’s headquarters and factory were moved in Fremont, California, to Austin, the capital of Texas.
Musk said in this context, "Tesla is the last car company whose factory is still located in California, and" SpaceX "is the last company specializing in the aviation and aerospace industries still in California.
Musk criticized the measures taken by the state after the outbreak of the Corona pandemic and the closure of workplaces.
Florida and Texas are seen as providing a work environment with minimal restrictions.
Elon Musk, founder of Tesla, announced the relocation of the company's headquarters and factory from Fremont, California, to Austin (Getty Images)
High real estate and high taxes
Some observers say that these companies' decision to leave Silicon Valley is partly due to the outbreak of the Corona pandemic and its impact on the workplace, as employees are working from home.
Some technology companies have announced that they will allow employees to work from home permanently after the end of the Corona crisis.
"The coronavirus has mainly encouraged people to work remotely and try other places to live," says Keith Rapua, an investor in venture capital, who moved from San Francisco to Miami.
Rapua, who previously worked as an executive at PayPal and Linkedin, said that he is tired of high taxes in California, high living costs, and social problems such as homelessness.
"It is becoming clear that there are better places to live," he said.
California imposes a higher income tax on individuals, unlike Florida or Texas.
Then a businessman like Elon Musk, who is currently the second richest man in the world with an estimated wealth of $ 155 billion, could save huge sums after moving to Texas.
According to the writer, eliminating the high income tax could raise the wages of executives in companies that decide to leave California by 13.3%.
Real estate prices are one of the main barriers to stability in California, as the state ranks as the most expensive real estate market in the United States.
The average home price in California in November was $ 1.38 million, while the cost of housing in Texas is a third of that amount.
As of last November, 39 companies specializing in technology and other industries have moved from California to Texas, which houses the headquarters of Dell, which specializes in computer and technology.
And the company, "Tesla", laid the foundation stone for its new plant in Texas, which has an area of about 372 thousand square meters and is expected to provide 5 thousand jobs.
It is decided that the company will manufacture its two new cars, "Cyber Track" and "Model Y".
"We talk about ourselves as human capital," says Laura Hoffman, executive director of the Austin Chamber of Commerce, the district of 25 colleges and universities. "I also won't underestimate the importance of quality of life, this is where people want to live. I think 2020 has confirmed us." We all have more options when it comes to where to stay. "
Tech investor Joe Lonsdale has also moved his company headquarters from California to Austin.
"It's really clear that there are a lot of places to live across the country, not just Silicon Valley, given the cost of living, skills and all the other things," he said.
The giants "Facebook", "Apple" and "Google" have not decided to leave Silicon Valley (Reuters)
Do companies leave permanently?
But Silicon Valley's advocates insist - according to the author - that companies have not left permanently and will continue to employ people in the region.
"Companies have not left Silicon Valley for good. They are still hiring people here and they still keep innovating too," said Peter Lero Munoz of Technology Industry Defense.
"We have a unique mix of world-class universities, as well as great investment capital, and we are attracting immigrants from different parts of the world at a higher rate than any other," Munoz told the local KTVU station in San Francisco. Another area. "
Carl Guardino, former CEO of the Silicon Valley Leadership Group, believes that the departure of innovators and pioneering personalities is not a good thing, and believes that companies are free to go where they want and settle where they find themselves appreciated.
"This situation causes some of the best innovators to move elsewhere, and are often followed by the rest of the staff. However, this is not good for our region or our state," Guardino adds.