Adios California, Oracle the latest tech firm to leave California for the wide open (low tax) Lone Star State Oracle is shifting its California headquarters to the Lone Star State, saying a change of scene will "improve our employees’ quality of life and quality of output." "Oracle is implementing a more flexible employee work location policy and has changed its Corporate Headquarters from Redwood City, California to Austin, Texas," …
“Kindly move yourself and your family over a thousand miles to a new location to improve your quality of life. If you do not want to do that then you are no longer an employee and we do not care that your quality of life just took a change for the worst”. <beep>
The hope (for the people who already live there) is that moving people from a shitty place doesn't ALSO trend the place they move to into becoming "similarly shitty" because they brought their politics with them...
I've also considered a move to Texas. California's getting pretty bad these days.
California, from what I read about, has become neo-liberal hell.
The auqifer in Central Valley has been drained so low that ordinary wells are no longer deep enough. All so that we can have inexpensive almonds. This madness with the driving of bees thousands of miles for the aformentioned almonds. The yearly wildfires that surely have something to do with the very low auqifer levels. The reports of smoke this autumn were not good.
And there are the obscenely high property prices, NIMBYism on a grand scale, people living in camper vans and the general homelessness problem.
I've long thought that America has a fundamental problem in its categorisation of people as 'winners' & 'losers', which is often called 'zero-sum thinking'. The fact that such a massive percentage of the population is $400 away from disaster. The massive lack of solidarity within American society has shown how rotten America is at heart.
Or am I wrong?
To be fair, the water problems in California are at least as much the fault of the Federal government as the state. In particular, they're the result of bad policies created by the Bureau of Reclamation (which rivals the Army Corps of Engineers and the Tennessee Valley Authority for the title of "most destructive US Federal organization"), and rampant corruption which let the Bureau ignore the only good aspects of those policies.
The result was not just massive misuse of water resources, but misuse to benefit a handful of wealthy agriculturalists rather than the bulk of the state's population.
(There are critiques of Cadillac Desert, but the updated edition is still the best accessible, general treatment of the water problem in the western US that I know of.)
Larry doesn't care where his employees live or if they have houses. Oracle's just using the cost of housing in the bay area to hide the real reason for the move - money.
It's going to be entertaining to watch a bunch of tree-hugging Californians integrate with Texan gun-toting rednecks. Yee-hah!
San Francisco is only into the kind of progressive politics that don't require effort or money. They're happy to accept your right to choose whatever pronouns you want without batting an eyelid, but can come up with a thousand well-rehearsed arguments to show that building any new housing in a city with endemic homelessness is actually a bad thing.
Last time I checked, it was less than half as expensive.
A three bed, 2 bath, 1400sqft attached garage home on a .25 lot just South of San Francisco (where Oracle is was located) currently runs between 1.5 and 2 million. Dollars. US Dollars. The same home in Austin would be, what, 300 to 400K?
Price of gas here in Sonoma is about $3.45/gallon, same in much of the rest of the Bay Area. Price in Austin, about a buck sixty (Sams or Cosco).
Etc.
Cheer up, the music will be back. Not even Oracle can fuck THAT up ... but I'll bet you a Lone Star that Larry will try if someone is jamming within earshot of his home. The man has no soul.
Some parts of California are expensive. Most of California is as cheap as anywhere else. The problem is that everyone wants to live in a small area like the SF penninsula so it gets really crowded and very expensive. There's plenty of other places to live, especially if you're working remotely.
Austin is quite a livable city but most of urban Texas is actually pretty naff to live in, you live there because you have to, not because you want to. Its also not that cheap -- sure, there's no state income tax, just endless user fees instead (they've got to raise money somehow). Its also not a good idea to become unemployed or sick in Texas.
There are plenty of both in TX at the moment.
Texas is also a hotbed of sedition (Texas AG's case in SCOTUS with all those GOP lawmakers and Tweeter in Chief). Always has been an outlier state but in 2020, it became clear that many didn't want to be in the USA any longer.
Trump won ok and 74 million will continue to believe it for decades.
There are many US metropolitan regions that have much lower cost of living expenses than Silly Valley or Baghdad by Bay (Herb Cain's description of SF). Also, many of these areas do have a fairly strong tech area even if it is not as well known as Silly Valley so local/regional talent is available if the staff does not want to move.
Don't let the door hit you in the ass on the way out, Larry. You will not be missed.
"Will other companies follow suit and leave the Golden State for cheaper climes?"
We can but hope. Hopefully they'll leave en-mass. I'll bet it'll take less time to get life back to normal around here than it did for the fuckwitted imports to screw it up.
I feel sorry for the fine people of Austin, though. Good luck, folks. You'll need it. All the rest of y'all, if you have never visited Austin, now is the time to go. It'll be fubared before long, and you'll miss out on what used to be a good thing.
California has the highest tax rate of the whole USA and some quite strange taxes, it is broke and seeking to drastically raise taxes again.
Property tax is 0.7 to 1.25% of your property value per year paid to the government, own it for 40 years and you've basically paid half your mortgage to the state. A proposed new 54% highest rate of income tax on top. Rampant homeless tents everywhere (they recently made it illegal for the police to "steal" remove or push out homeless tents).
California is worried its residents will leave due to all the new taxes. So they want a new rule that will keep these taxes in place for up to 10 years after you leave the state.
So all in all. It's not just the rich who want to avoid taxes in this state.
The homeless problem is really an issue of climate -- many places you can't live outdoors year round, its too hot or too cold. Its one other reason to live here - you save a fortune on your utility bills, especially if you've solar panels and drought tolerant landscaping.
Our daugher was in the oil business; she spent four or five years in Midland/Odessa. In the oil patch; landscape of thorn bushes and pumpjacks. The air had a nice niff of oil and the water was undrinkable (and you couldn't wash in it). Eventually she was tranferred to Houston. Large, not very nice climate to live in and then the hurrican hit. She was lucky, she ended up living on an island so was able to escape in her truck (you don't have cars in TX). There are other garden spots -- Amarillo, for example. All inexpensive. Ish. Housing costs ebb and flow with business dynamics; the daughter's not in the oil business any more, she got out before the latest bust cycle.
The thing is, nearly everyone who tells me that Califrornia is finished doesn't live here. They say its expensive, citing taxes and stuff, and completely neglect the raft of fees that they pay in lieu of taxes where they live (no taxes/fees, no service -- there's no magic to this). I'm quite happy to let people think that the place stinks, its crowded enough in places as it is so the fewer who come here the better I like it.
(PS -- I defy anyone to find anything in Dallas/Fort Worth)
Tangent to this is at least one anecdote: my wife's company (a reigning Fortune 5-10 depending on the year, "Healthcare" provider) had stopped hiring out of California about 2.5 years ago. It simply did not make any financial sense. Her specific department hires a massive amount of RNs to work from home handling various triage duties that on-call doctors do not want to be bothered with. A typical experience level for this line of work is about 5-10 years of experience. Their RNs' salaries in California were somewhere around and often times *more* than most MDs in other states that they would be working on behalf of.
... till now this is a classic move of companies at the end of the lives trying to make some more money with tax breaks and real estate sales before becoming no longer relevant. Anyway California became crazy on its own too - companies moving away could have some benefits on showing some costs have gone too far.
Will Larry move his mansion and boats to Texas too?
Not really a classic move of a failing company. Many companies migrate there manufacturing and HQs over time as circumstances dictate. It could be that the loons running CA have made running a business very difficult and expensive that many companies will say adios as soon as they can.
For example California AB5 makes using local contractors exceedingly difficult for all industries including freelance writers and photographers. So if you need some talent for a about a year in CA you have to hire them as permanent employees not as a contractor. In other states you could hire the person as contractor with understanding they are only onboard for the project. Both know in both situations the temporary staff will be let go but in the second case it is more honest and explicit. The contractor route is not necessarily abuse by the company. The intent of the bill was to harmer Uber but its effects are much more widespread. It should be noted that Federal law does have rules on who qualifies as a contractor versus an employee. AB5 goes much further than Federal law.
On this side of the pond, states will compete with each other to get major company facilities built in their state. Some are more aggressive about it. States want the overall tax revenue these facilities will generate, this includes downstream taxes on new businesses, housing, etc. So companies moving to Texas or elsewhere is not now if their current location becomes intolerable.
There's two sorts of contractor. Independent contractors, the ones that are likely to be affected by AB5, don't exist in our trade. The IRS won't allow it, it hasn't allowed it for years. It requires anyone who works substantially for one employer as a "programmer" to be paid as one with withholding and so on, just like a regular employee. The other sort of contractor is far more common and is in widespread use. These controactors are hired through a company, they're paid wages &tc. by the company and are to all intents and purposes employees except they don't have any employment protections (and stock options and so on). (The majority of developers working for Intel, for example, are "green badge" contractors rather than "blue badge" employees proper.)
AB5 was really an attempt to deal with the abuse of casual labor by companies like Uber. These companies have business models that can end up actually costing the 'contractor' money because they don't fully amortize capital costs like the cost of purchasing and maiintaining a vehicle. The law wasn't that well worked out but is now moot due to successful proposition campaign -- Uber, Lyft et al chipped in some $200 million to get a Proposition passed that rolled AB5 back and -- just to get value for money -- prevented any further moves on ths without a seven eitghts majority in the Legislature.
"Will Larry move his mansion and boats to Texas too?"
Do you really think Larry-san would live anywhere that he might accidentally come into contact with a redneck? Hell no! That's for the Great Unwashed plebs, like Zuck and Bezos.
Long and short: he moved to his private tropical volcanic island[0] a while back. Probably took his boats with. Left the mansions behind, one never knows when one might need to house an ex-wife (or four), or need reasonable accommodations on a business trip. No word on white Persian cat(s), nor if he has managed to smuggle in his MiG and various supercars.
[0] No shit. He owns the island of Lana'i in the Hawai'ian chain ...
I lived in East Bay (Walnut Creek) in the 90s and life was getting a bit of a grind back then. Nice place and all that but getting a bit crowded and always the thought that the big one could hit anytime and the whole place might slip into the Pacific and suddenly Sacramento become a coastal city.
...it is about the cost of corporate real estate and how much is going to be needed in the future. More people working remote = less office space needed. If they need to break the lease to downsize, might as well break the lease for a cheaper location too.
And from an executive level... California keeps flirting with laws that limit executive compensation. To borrow a quote from Mr. Miyagi about how to take a hit, "Remember, best block no be there."
Yes it is. If it costs your employees X amount more to live where your head office is without living in a tent then you have to pay them the extra or else they won't work for you.
The companies and employees are not the bad guys here, it is the local landlords who vote for politicians who won't allow more housing development so that they can extract economic rents.
Our fourth weapon, fanatical devotion, requires a desperation to cross the finish line. This is integral to the valley mystique. People in the valley aren't particularly smarter compared to say those in Rochester or Minnesota. The special sauce is just a tarted up version of the carrot on a pole that has bamboozled generations of donkeys. When you can actually afford your lifestyle, destroying yourself to benefit a Chief Psychopathic Officer is a non-starter.
If the valley empties, short BMW, Porsche, Tesla, ....
Oracle is smart. If Biden takes office the taxes on corporations and small businesses are going to go to the clouds. All companies are going to have to reduce the number employees by large numbers. I'm getting out from where I live and moving to Texas because they care about their citizens.The quality of life is just plain better in Texas.
I've worked in both areas. I couldn't live in San Jose because of the traffic congestion. Efforts to fundamentally change this have been half hearted for way toolong. The Bay Area is choking on it's own success.
Sadly many cities / conurbations are moving the same way. With work from home finally going of age perhaps that will help. Larry is off the Hawaii after all ....
No mention of the fact that Texas State Govt have spent more than $25 billion over the last decade paying California firms to relocate there? Texas has some of the highest property taxes in the nation the reason that it’s cheap for businesses to move there is because the state pays a subsidy to those business they reimburse the taxes for California corporations often for up to 10 years. I happen to know all this because I was one of the people who would answer the calls when our company was being actively solicited by the state agency.
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