California “Techsodus”: Tech Companies, Billionaires, Millionaires, Tech Employees Flee San Francisco & Silicon Valley

0
182

by Wolf Richter, Wolf Street:

And we coined “Management by Zooming Around.” Which is what Oracle’s Larry Ellison is doing.

When on December 11, Oracle disclosed that it “is implementing a more flexible employee work location policy and has changed its Corporate Headquarters from Redwood City, California to Austin, Texas,” it was another step in the process that we will henceforth call “Techsodus.”

TRUTH LIVES on at https://sgtreport.tv/

The exodus of tech companies, executives, billionaires, millionaires, and regular tech employees from California, and particularly from San Francisco and Silicon Valley, is a combo of fleeing California and a shift to work-from-anywhere. Texas, Florida, Colorado, and other states have been among the destinations. Texas and Florida don’t levy state income taxes, so sure.

But Larry Ellison, co-founder and chairman of Oracle, isn’t moving to Texas along with the headquarters of his company. He has moved his primary residence to Hawaii, following Oracles new doctrine of working from anywhere. And Hawaii’s state income taxes are not far behind California’s.

Oracle already has a 560,000-square-foot campus in Austin, which it opened in 2018 – and moving its headquarters to Austin might not change all that much at first in terms of employment. Oracle said that it would “continue to support major hubs for Oracle around the world,” including its soon-to-be former headquarters in Redwood City. Oracle, founded in 1977, is one of the older tech companies that helped make Silicon Valley.

The move of its headquarters to Austin will “provide our personnel with more flexibility about where and how they work,” Oracle said. “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.”

“By implementing a more modern approach to work, we expect to further improve our employees’ quality of life and quality of output,” Oracle said.

And Larry Ellison is leading by example, telling his employees in an email, first reported by Recode: “I’ve received a number of inquiries about whether or not I will be moving to Texas. 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.”

In the old days, the doctrine for achieving excellence was called “management by walking around.” Now it’s “management by Zooming around,” another term we coined today.

Working from anywhere for Ellison means working on a 140-square-mile island, a former pineapple plantation that Ellison acquired (98% of it) in 2012 from David Murdock who’d obtained it via his purchase of Castle & Cooke that Dole Food had spun off. The economy on Lanai has been dedicated to tourism: It has three luxury hotels that Ellison owns, plus a grocery store that Ellison owns, a school, an airport where Ellison’s corporate jets drop him off and pick him up, and about 3,000 residents whose jobs mostly depend on Ellison’s operations on the island. Ellison also owns part of the housing on the island, and to top it off, he bought the only local newspaper – another billionaire buying up newspapers.

Techsodus by companies.

Oracle’s decision to move its headquarters to Texas followed the announcement by another Silicon Valley company, Hewlett Packard Enterprise to build a 440,000-square-foot campus near Houston for its new headquarters. Like Oracle, HPE already has big operations in Texas.

Charles Schwab is moving its headquarters from San Francisco to its campus in Westlake, a suburb north of Dallas; the change, announced in late 2019, will be effective this January 1. Schwab’s workforce in San Francisco has been shrinking for years.

Macy’s announced on the eve of the Pandemic in early February that it would shut down its entire tech center in San Francisco – the headquarters of macys.com, Product and Digital Revenue, and Technology – and lay off 1,080 employees and contract workers, including executives, software engineers, and analysts. The activities would be moved to Macy’s locations in Atlanta, which “will serve as the primary technology hub for the company,” it said, and in New York.

Macy’s was one of the top 10 ecommerce sites in the US at the time, according to eMarketer. But Macy’s has since then fallen off eMarketer’s Top 10 list.

Palantir Technologies said in August that it was moving its headquarters from Silicon Valley’s Palo Alto to Denver, Colorado, and its website now lists Denver as its headquarters.

Techsodus by billionaires and similar.

Ellison follows in the footsteps of another billionaire that bailed out of California, Elon Musk, who’d said last week that he’d already moved to Texas, surely salivating at the prospect of dodging state income taxes. Musk had followed in the footsteps of Dropbox CEO Drew Houston, who’d purchased a home in Austin for his full-time residence, as was reported in November, after the San Francisco company switched to permanent work-from-anywhere in October. Douglas Merritt, CEO of San Francisco enterprise software company Splunk, which also makes tools for monitoring work-from-anywhere, purchased a home in Austin as primary residence.

Read More @ WolfStreet.com