Oracle is the latest tech giant to quit Silicon Valley

Cloud giant Oracle has become the latest technology heavyweight to leave Silicon Valley, after announcing that its headquarters would be moving to Texas.

In a regulatory filing posted on Friday, the company said that the relocation to Austin, Texas, “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.” Oracle currently has offices in Santa Monica, Seattle, Denver, Orlando, and Burlington, in addition to Austin and its former HQ in Silicon Valley.

The high taxes levied in the state of California, allied to workplace shifts brought about by the coronavirus pandemic, are believed to be the main driving forces behind the move.

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With around 135,000 employees, Oracle is the world’s second-largest software maker but the company’s move away from California is not entirely surprising. Last year, Oracle shifted its annual conference from San Francisco to Las Vegas, and the organization’s political announcements have seemed increasingly out of place among its more left-wing Silicon Valley peers.

A taxing transition

Oracle is not the only major tech firm to decide that California is no longer the right fit for them. Hewlett Packard Enterprise is moving to Houston, Palantir Technologies has shifted its HQ to Denver, while entrepreneur Elon Musk has also moved a number of his projects out of California recently.

The coronavirus pandemic has caused many organizations to reconsider where the best place for them to be located is. In addition, with remote working more prominent, some businesses have even begun to question whether paying substantial rent rates for a central office makes financial sense anymore.

However, while corporate concerns such as these are important, there may be a simpler reason for founders and shareholders to move their businesses out of California. The west coast state currently has the highest rate of personal income tax in the US, while Texas has no personal income tax rate at all.