The global COVID-19 pandemic is redefining how Silicon Valley giants operate, with Hewlett Packard Enterprises Co. (NYSE:HPE) becoming the latest company to move its headquarters from California. The company, which started in Palo Alto, California, is relocating to Houston, Texas.
HPE moving to Houston to lower costs
The company disclosed the plan to move when it posted its Q4 earnings following a challenging year in which it recorded a full-year loss necessitating lowering of costs. The relocation of HPE, which is linked to Silicon Valley’s origin, signifies how the area that was once synonymous with technology innovations has lost its allure.
Houston is the company’s biggest employment hub in the US, and it is an attractive market for recruitment and retaining of future diverse talents. The company indicated in its Q4 earnings release that it is currently constructing an ultramodern new campus in the area. However, it is unclear how many workers the move will affect, but HPE stated that layoffs could come with the move.
COVID-19 pandemic pushing companies to adopt remote working
The COVID-19 pandemic, which necessitated the need for remote working, has resulted in chief executives and employees fleeing the San Francisco Bay Area for affordable locales. Interestingly the loss of HPE, which is one of the big tech giants in Silicon Valley’s history, is an indication that the area no longer has the allure to attract large and small technology firms that it once boasted.
In recent years Austin, Texas has been attracting tech companies and startups because of liberal regulations and low taxes, and affordable real estate. HPE said that Houston’s move would see the company save on costs because of cheap real estate. Also, hiring is cheaper and less competitive compared to California.
Recently Palantir Technologies Inc. moved to Denver, Colorado, from Palo Alto. Also, electric car manufacturer Tesla Inc. is planning to open a factory in Austin in 2021. Some companies are letting employees work remotely as they seek to save on real estate expenses.