California’s business climate crisis leads to a tech exodus to “Silicon Hills.”
Last year, I reported that the tech giant Oracle moved its important annual conference from San Francisco to Las Vegas, citing dirty streets and high hotel costs.
The streets have certainly not gotten cleaner, nor the costs less. Add the state’s pandemic business shutdowns into the equation, and it is little wonder that the California cash cows are seeking greener pastures.
Now, Oracle founder Larry Ellison has announced that he is moving his permanent residence to his Hawaiian island, leaving California after relocating the firm’s headquarters from Silicon Valley to Austin, Texas.
Ellison, 76, who Bloomberg lists as the 11th richest person in the world, told employees on Monday that he will work via Zoom from Lanai, Hawaii’s sixth largest island.
The billionaire, who has a net worth of about $75 billion, owns 98 percent of Lanai and employs the majority of its residents in his resorts and stores after purchasing his majority stake for $300million in 2012.
On Friday, Oracle Corp., where Ellison was CEO for nearly 40 years, said it will move its headquarters from California to Austin, letting employees choose their office locations and decide on whether they want to work from home.
Ellison is not only going to take advantage of his great wealth but this era’s mode of working from remote locations via Zoom.
“I’ve received a number of inquiries about whether or not I will be moving to Texas,” Ellison wrote in a memo to Oracle’s employees. “The answer is no. I’ve moved to the State of Hawaii and I’ll be using the power of Zoom to work from the island of Lanai. Mahalo, Larry.”
This announcement comes on the heels of innovator Elon Musk moving his companies to Texas, citing the business climate crisis that is occurring in the state.
Elon Musk has moved to Texas to focus on two big priorities for his companies: SpaceX’s new Starship spacecraft and Tesla Inc.’s new Gigafactory, currently under construction in Austin.
There also are potentially enormous tax implications for Musk, who recently became the world’s second-wealthiest person. Texas has no personal income tax, while California imposes some of the highest personal income levies in the nation on its richest residents.
“I have moved to Texas,” Musk said Tuesday, speaking in an interview with the Wall Street Journal. Musk did not specify where or say whether he has bought a home.
Musk, 49, has lived in the Los Angeles area for two decades. He’s the chief executive of SpaceX, based in nearby Hawthorne, and of Tesla, which is based in Palo Alto and has its main factory across San Francisco Bay in Fremont.
Musk criticized California in the interview, saying the state had become complacent with its status as an economic giant and less attractive to him.
“If a team has been winning for too long they do tend to get a little complacent, a little entitled, and then they don’t win the championship anymore,” he said. “California’s been winning for a long time. And I think they’re taking them for granted a little bit.”
It appears that the tech exodus is just getting started.
The tech hub, nicknamed “Silicon Hills,” is already home to industry leaders including Advanced Micro Devices, Dell and others.
As of November, 39 companies — in tech and other industries had relocated to Austin so far this year, according to data from the Austin Chamber of Commerce. Among those are 8VC, the venture capital firm run by Palantir co-founder Joe Londonsdale. Tesla is also building a 4 million square foot facility just outside Austin that’s expected to create 5,000 jobs, the Chamber’s records show.
And though it’s not a tech firm, e-cigarette maker Juul Labs moved its corporate office from the Bay Area to Austin last year.
“We talk about ourselves as the Human Capital,” said Laura Huffman, president and CEO of the Austin Chamber, citing the diverse and highly educated population of the region as one reason companies seek to relocate there. She noted that 47% of the city’s working population has a bachelor’s degree, thanks to the 25 colleges and universities in the area.
“I also would not underestimate the importance of quality of life,” Huffman said. “There are a lot of things about this community — it’s got a great local flavor, a great music scene, it’s an outdoors city. That’s where people want to be. I think 2020 has taught us all that we have more choice when it comes to where we live.”
I suspect that Ellison will be joined by other Californians who will relocate soon…though not to their own islands.
yea, I'm debating moving my single wide to another park as well.
— Terry (Ret.) (@editor_wp) December 16, 2020
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