Hewlett Packard Enterprise Co. is moving its headquarters out of high-priced Silicon Valley to the Houston area.
The company disclosed its plan to relocate in its fourth-quarter earnings following a year of losses, highlighting its need to lower costs, according to the Wall Street Journal.
“I think what we are seeing here is a company that needs to seek cost savings wherever it can find them,” Charles King, president and principal analyst at Pund-IT Inc., an IT consultancy, told the Journal. “It’s a sad day for Silicon Valley and hopefully a bright day for HPE and its shareholders.”
However, CEO Antonio Neri said that the move, which resulted from a reassessment of where and how Hewlett Packard Enterprise works, will make it easier to hire minorities. Silicon Valley is relatively homogeneous and is the nation’s most expensive housing market, with simple ranch homes sometimes fetching seven-figure prices.
“Houston is also an attractive market for us to recruit and retain talent, and a great place to do business,” Neri said, adding that as one of the largest and most diverse cities in the country, “Houston provides the opportunity over time to draw more diverse talent into our ranks.”
The coronavirus pandemic, remote working, and rising costs affiliated with Silicon Valley have similarly led other companies in search of alternatives. Texas in particular has attracted more technology companies and startup development in recent years, offering lower taxes, less regulation and more affordable real estate.
Next year, for example, Tesla plans to open a factory in Austin, known for its tech community.
Earlier this year, Palantir Technologies, founded in the Bay Area in 2003, moved its headquarters to Denver.
[WSJ] — Sasha Jones