Companies Left California in 2025; Next Year Could Be Worse

The march of both residents and companies out of California continued in 2025, including the high‑profile exit of In‑N‑Out Burger to Tennessee.

In‑N‑Out’s president, Lynsi Snyder, cited the difficulty of raising a family and operating a business in California, WeHo Online reported. Her decision echoes earlier relocations by other California companies, including Tesla’s move to Austin, Texas, and LandSea Homes, also to Texas.

In 2025 alone, several major companies announced relocations: Chevron to Texas; haircare manufacturer John Paul Mitchell Systems to Wilmer, Texas, and Realtor.com to Austin. In addition to Tesla, several other Elon Musk-associated firms have left the state, namely SpaceX and X. Oracle, led by Larry Ellison, relocated its headquarters in 2020.

A number of these companies — In‑N‑Out, Playboy, Oracle and Musk’s companies — tie directly to California’s image as a center of glamor, cars and tech-created wealth. “The California dream is about the opportunity to be discovered, but today you can do that from anywhere with a social media account,” WeHo Online said.

Motivations cited by departing companies and residents are consistent. They include high taxes, extensive regulation, elevated business costs, homelessness, public safety concerns, school system challenges, and political or social tensions.

California’s business climate rankings reinforce these concerns. The Tax Foundation places the state 49th in its Business Tax Climate Index, far behind states like Tennessee, Texas and Florida — destinations now attracting California companies.

Population trends mirror the corporate shifts. According to the Bureau of Labor Statistics, California saw net emigration exceeding 200,000 people between 2024 and 2025. Fiscal pressures are mounting as well. The state faces a projected $50 billion to $70 billion deficit in 2025-2026, a stark reversal from the $97 billion surplus recorded in 2021-2022. The Reform California and Tax Foundation attributes the swing to California’s reliance on income taxes from high earners and capital gains — revenues that decline when wealthy residents and major employers leave.

Looking ahead, the state’s new 2026 “Billionaire Tax,” which would require individuals classified as billionaires to pay 5 percent of their wealth annually, is expected by critics to accelerate the outflow of high‑net‑worth individuals and job‑creating companies.

— Joel Russell