In recent times, a number of companies have decided to pack up and leave California, seeking refuge from soaring costs, heavy regulations, and high taxes.
Interestingly, even CBRE, which monitors corporate relocations out of California, has joined the exodus.
California may boast the title of most populous state and the largest economy in the U.S., yet businesses are opting for states like Florida and Texas, where they won’t have to deal with a state income tax.
This migration has often been attributed to the state’s progressive policies, including stringent climate governance and business regulations.
According to reports, California has the highest number of business regulations compared to any other state, adding additional burdens to already significant costs and taxes faced by businesses and consumers.
Notable companies that have left the Golden State include:
Chevron, which announced plans to shift its headquarters from San Ramon, California, to Houston, Texas, in August 2024. This move marks the end of Chevron’s 145-year history in California, though they haven’t fully detailed their reasons. CEO Mike Wirth explained that the transition is about relocating closer to the core of their industry, despite some policy disagreements with California.
In another instance, Elon Musk has attributed the departure of his companies—X and SpaceX—specifically to California’s political landscape, citing laws regarding transgender rights. He indicated that these legal developments were the tipping point for SpaceX’s move from Hawthorne to Starbase, Texas. Musk has also mentioned the high housing costs in the Bay Area as a driving factor for relocating Tesla as well.
Charles Schwab, who left California in late 2019, pointed to steep business costs and taxes as issues that influenced their decision. Schwab, now based in Westlake, Texas, built a substantial 500,000-square-foot campus there.
Oracle, too, has relocated numerous times, moving from California to Texas in 2020, only to eventually settle in Nashville, Tennessee. The company has been adapting to a more flexible work environment for its employees.
Public Storage, founded in 1972 near San Diego, recently declared its intention to move its headquarters from Glendale to Frisco, Texas. The CEO noted that Texas offers a better talent pool, which has been beneficial for filling corporate roles. Additionally, changing California laws concerning rent increase disclosures may have prompted this decision.
Numerous other companies have followed suit, including:
- Hewlett Packard Enterprise
- CBRE
- McKesson
- Blaze Pizza
- John Paul Mitchell Systems
- D-Wave Quantum Co., Ltd.
- Palantir
- Yamaha
- Neutrogena
