Oracle and Tesla are in. So is Hewlett Packard Enterprise (HPE). But what about TikTok? And what’s the deal with Facebook’s rumored real estate grab in downtown Austin? More than 200 companies have relocated to Texas over the past decade, and still the business network YTEXAS says 2021 could be the biggest year yet for relocations.
YTEXAS maintains a Corporate HQ Relocation to Texas Tracker on its website, tracking major relocations to the Lone Star State since 2005. A glimpse at the tracker shows that 2010 was a huge year for corporate relocations, with Texas gaining HQ status for Accruent, LegalZoom, and more. Since then, giant HQ wins for the state include Trend Micro (U.S.), Quantum Materials Corp., Toyota Motor North America, Inc., McKesson, PGA of America (with the move set for 2022), Charles Schwab, McLaren Automotive Ltd North America, Zoho, and more.
The volatility of 2020 didn’t slow things down in some parts of the state. Take Austin, for instance, which is seeing an influx of relocations and expansions. According to the Austin Business Journal (ABJ) and Opportunity Austin, a record-breaking number of new jobs attributable to corporate relocations and expansions—nearly 10,000—have been announced in Austin this year, despite the pandemic.
“In fact, the health crisis may have accelerated the trend, with many companies and professionals seeking lower-cost locales,” writes ABJ’s Kathryn Hardison. “Fast-growing Austin has been on the radar of many C-suite executives for several years, with its growing tech and manufacturing sectors, and it doesn’t appear the pandemic has put a halt on economic development.”
“Texas’ business-friendly climate paired with the Austin region’s abundant talent pool and incredible quality of life makes us a magnet for businesses,” adds Austin Chamber Senior Vice President of Economic Development Charisse Bodisch. “The Austin region has proven itself to be resilient even amidst the pandemic.”
Étienne Cadestin, founder and chief executive of Longevity Partners Ltd., chose Austin as the base to establish the real-estate advisory firm’s foothold in the U.S. ABJ reports that Austin beat out Portland, Salt Lake City and Miami for Cadestin because of its lower cost of living relative to the coasts, its attractiveness for recruiting, and its appetite for sustainability and “developing a green community.”
What’s the Deal with Oracle, Tesla, TikTok, and Facebook?
If rumors are correct, the momentum in Austin is just beginning. There’s talk Facebook is eyeing 1 million more square feet of downtown office space—the equivalent of two Frost Towers. “In normal times [outside of the pandemic], that size of space could fit roughly 5,000 employees…That would be a significant boost from the 1,300 employees that the company currently has in Austin,” says Hardison.
Could it be a HQ relocation? It’s unlikely—as the tech giant is also gobbling up office space in New York and Seattle, too. However, Oracle just announced its HQ move from California to Austin.
“We believe these moves best position Oracle for growth and provide our personnel with more flexibility about where and how they work,” officials explained in the company’s Dec. 11 filing with the U.S. Securities and Exchange Commission.
And if President Donald Trump and Governor Greg Abbott have their way, TikTok may bring its U.S. headquarters here, too. The move would be potentially related, as Oracle has emerged as an interested minority investor in TikTok.
“Shortly after Oracle — a California-based tech company with an Austin campus — emerged as a potential buyer last week, Gov. Greg Abbott tweeted that he had spoken to the president about Texas housing the possible new TikTok headquarters,” reports the Texas Tribune’s Dan Rosenzweig-Ziff.
“All of the technology will be maintained here,” Trump said at a North Carolina rally. “They’re going to move probably to the great state of Texas.”
TikTok announced that a U.S.-based global headquarters could bring 25,000 jobs across the country. According to the Austin American-Statesman, that has so far translated into a plan to hire 2,000 Austin-based employees. But the deal has yet to be closed—it’s all speculation for now.
What isn’t speculation is the impact Tesla is already having on the region’s job count. With Tesla’s gigafactory in East Austin underway, the ABJ reports that the company expects to employ 5,000 workers, with hundreds of jobs already being filled for both the construction of the facility and for operations.
Among those relocating for Tesla “employment” is Tesla Inc. CEO Elon Musk himself, who recently announced that he just moved to Texas, too. He follows other tech executives like Dropbox CEO Drew Houston who have personally moved to Austin in recent months.
Other Great Texas Wins
Adriana Cruz, executive director of Economic Development and Tourism for Gov. Greg Abbott’s office, told ABJ the office has 196 active relocation or expansion projects in its pipeline right now.
Most notable among recent wins is Hewlett Packard Enterprise (HPE) moving its HQ to the Houston area from San Jose, California. The move won’t immediately bring many new jobs (perhaps a few hundred), since HPE has already had a solid presence in Texas for years. But it does offer other benefits.
“Psychologically it’s just a huge boost for Houston and what we’re trying to do to diversify our economy,” says Rand Stephens, principal and managing director of the Houston office of commercial real estate company Avison Young. Stephens adds that the win signals Houston is more than just an energy town. It’s also proof California companies aren’t just moving to Austin in droves. The entire Lone Star State is getting in on the action.
“As we look to the future, our business needs, opportunities for cost savings, and team members’ preferences about the future of work, we have made the decision to relocate HPE’s headquarters to the new campus under construction in Spring, Texas, just outside of Houston,” writes HPE’s President and CEO Antonio Neri. “Houston is…an attractive market for us to recruit and retain talent, and a great place to do business. We also anticipate long term cost savings associated with this move that we can reinvest in key areas of our business and innovation.”
Another California company that’s no stranger to employing Texans but also shifting HQs to the Lone Star State is CBRE Group. The country’s largest commercial real estate services firm is naming its Dallas office as its new HQ. And while job numbers in both California and Texas won’t change immediately, “the move is seen as a symbolic boost for the Dallas-Fort Worth area, which according to the Dallas Morning News led the country in commercial real estate sales through the first nine months of 2020,” reports The Real Deal.
Keep an Eye on Expansions
Corporate HQ relocations are one thing, but expansions both to the state and within the state are huge wins, too. Amazon, Facebook, Dropbox, Apple, Google, Visa aren’t new to the state, but continue to grow their footprints here. These major brands will continue to have a significant impact on the state’s job numbers in 2021.
Expansions can create even more jobs than corporate relocations although the latter represents a deeper commitment to the state, Ed Curtis, founder and CEO of YTEXAS, told FOX Business.
Leading the charge in new jobs due to expansions is Amazon, with several fulfillment centers popping up around Texas in 2021. Pflugerville‘s center will bring 1,000 new jobs, while El Paso’s first center is expected to create 700 full-time jobs. The Dallas-Fort Worth metroplex will welcome 500 full-time jobs with a new Forney center. Missouri City will gain 500 new jobs with its new center, while Waco will be adding 1,000 new Amazon employees at a center there. And those numbers don’t even reflect the hundreds of additional tech and corporate jobs being added, particularly in the Tech Hub of North Texas.
How Will It Affect Other Employers?
As we’ve stated before, an influx of business can improve business for all. But it does make the competition for talent more interesting.
“With so many jobs being added, the perception that ‘everyone’s out of a job’ is false, at least in the major metro areas around Texas,” says The HT Group Founder and CEO Mark Turpin. “High-profile companies like Tesla and Facebook bringing more jobs to Texas is a good thing. It will attract the best-of-the-best talent from across the country—that talent will bring family members in search of jobs and the growth will create demand for more services. But competition for talent will remain high. It won’t waiver the way it has in other parts of the country. You’ll have access to great job candidates but recruiting those candidates will be the challenge.”
To do that, you’ll need to strengthen company culture, benefits, and other areas of the business—areas we’ll be covering more in-depth in our blog in 2021. Be sure to sign up for our newsletter to receive those tips (visit our blog and scroll down to the newsletter sign-up at the bottom of the page) and contact us with specific staffing and recruiting questions.
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