Oracle Corp. is the latest Silicon Valley-based company to exit California amidst the pandemic with plans to shift its headquarters to Austin.
The $39 billion-a-year tech giant announced the headquarters move in a regulatory filing after stock markets closed Friday.
“Oracle is implementing a more flexible employee work location policy and has changed its corporate headquarters from Redwood City, California to Austin, Texas,” the filing says. “We believe these moves best position Oracle for growth and provide our personnel with more flexibility about where and how they work.”
The company already had a significant presence in Austin, with a five-story, 560,000-square-foot campus overlooking Lady Bird Lake. It also has employment hubs in Redwood City and Santa Monica, Calif.; Seattle; Denver; Orlando; and Burlington, Mass.
Oracle will let employees choose where they wish to work, whether from home or at one of the company’s office locations.
“By implementing a more modern approach to work, we expect to further improve our employees’ quality of life and quality of output,” Oracle’s filing says.
BREAKING: Oracle just announced they have moved their Headquarters to Austin.
— Greg Abbott (@GregAbbott_TX) December 11, 2020
Texas is truly the land of business, jobs, and opportunity.
We will continue to attract the very best.
Texas Gov. Greg Abbott took to Twitter on Friday to tout the relocation.
“Oracle just announced they have moved their headquarters to Austin,” he tweeted. “Texas is truly the land of business, jobs, and opportunity. We will continue to attract the very best.”
A handful of other California companies and high-profile business leaders have made similar moves. Tesla CEO Elon Musk announced earlier this week at The Wall Street Journal’s CEO Council summit that he had moved to Austin. He had bashed California for months over its handling of the pandemic. The billionaire CEO said he was maintaining company operations in California, but he also has significant operations for Tesla and SpaceX in Texas.
In July, Musk picked Austin as the site of Tesla’s new $1.1 billion manufacturing facility, which could employ as many as 5,000 people.
Also, HP Enterprise also announced earlier this month that it would relocate its headquarters from San Jose to the Houston suburb of Spring. Palantir Technologies relocated from Palo Alto this year, landing in Denver. The tech giants Google and Apple have been expanding their presence in Austin over the last several years.
Oracle has more than 4,500 employees in Texas, and company co-founder Larry Ellison said in 2018 that he expected the corporate campus workforce in Austin to grow to as many as 10,000, according to the Austin American-Statesman.
“We have a handful of hubs in the United States, and Austin is one of the key places we want to be because that’s where we think our people want to be,” Ellison told the Statesman two years ago at a ribbon-cutting ceremony for the campus.
The Austin campus includes an on-site apartment complex in an effort to recruit a younger and less costly workforce. The company had 135,000 employees as of the end of May.
Started in 1977, Oracle has been a foundational company in Silicon Valley, and its silver-blue cylindrical buildings in Redwood City, visible from U.S. Highway 101, are the rare landmark in the sprawling region. Some companies, executives and employees are ditching California because of concerns over the state’s tax rates and high cost of living, as well as arduous commutes in some locales.
Abbott addressed those concerns in a prepared statement.
“While some states are driving away businesses with high taxes and heavy-handed regulations, we continue to see a tidal wave of companies like Oracle moving to Texas thanks to our friendly business climate, low taxes, and the best workforce in the nation,” he said. “Most important of all, these companies are looking for a home where they have the freedom to grow their business.”
Earlier this week, Oracle reported a better-than-expected forecast for quarterly revenue, in a sign of improving demand for the software giant’s cloud computing technology after years of stagnant sales.
Revenue will climb 2% to 4% — to an estimated $10 billion to $10.4 billion — in the period that ends in February, CEO Safra Catz said Thursday in a conference call. Analysts projected $9.94 billion. Such gains would keep Oracle on track to post three consecutive quarters of sales growth after two fiscal years of declining revenue.
Catz and Ellison, the company’s executive chairman, have tried to focus on cloud computing services in an effort to revive languid revenue growth at the world’s second-largest software maker. Customer interest in the firm’s internet-based applications has finally offset declining demand for its legacy tools.
Sales of its Fusion application for managing corporate finances jumped 33% in the quarter, while revenue from NetSuite’s financial software, targeted to small and midsize businesses, increased 21%.
Oracle also is trying to become a technology partner and cloud computing services provider to ByteDance Ltd.’s TikTok in its bid to land major customers for its public cloud, but the deal remains mired in U.S. regulatory review.
Bloomberg News contributed to this story.
