News and Commentary

Hewlett Packard Enterprises Becomes Latest Company To Flee California For Texas
Igor Golovniov/SOPA Images/LightRocket via Getty Images

On Tuesday, as more and more businesses have done, Hewlett Packard Enterprises announced it was leaving California and moving its headquarters to Texas. Hewlett Packard Enterprise (HPE) has had its headquarters in San Jose, California, but the offices will now move to Houston.

In a statement announcing its fourth-quarter earnings, HPE, which is currently ranked 109 on the list of Fortune 500 companies,  wrote, “HPE’s largest U.S. employment hub, Houston is an attractive market to recruit and retain future diverse talent, and is where the company is currently constructing a state-of-the-art new campus.”

HPE’s move has significant emotional resonance, as it was one of the original tech companies founded in the Silicon Valley; in 1939 Bill Hewlett and Dave Packard started the company in a garage in Palo Alto.

“HPE will keep the San Jose campus, and will consolidate some of its Bay Area sites there, it said,” CNBC reported.

HPE had a revenue of $7.21 billion in the fourth quarter of 2020.

Texas GOP governor Greg Abbott celebrated the move by HPE, stating:

We are excited that Hewlett Packard Enterprise has chosen to call Texas home, and I thank them for expanding their investment in the Lone Star State by relocating their headquarters to the Houston region. Hewlett Packard Enterprise joins more than 50 Fortune 500 companies headquartered in the Lone Star State, including 22 in the Houston area alone.

That is because Texas offers the best business climate in the nation. Our low taxes, high quality of life, top-notch workforce, and tier one universities create an environment where innovative companies like HPE can flourish. We look forward to a successful partnership with HPE, as together we build a more prosperous future for Texas.

Antonio Neri, CEO of HPE, echoed, “As we look to the future, our business needs, opportunities for cost savings, and team members’ preferences about the future of work, we are excited to relocate HPE’s headquarters to the Houston region. Houston is an attractive market to recruit and retain future diverse talent and where we are currently constructing a state-of-the-art new campus. We look forward to continuing to expand our strong presence in the market.”

Abbott’s website pointed out that HPE already has locations in Austin, Plano, and Houston; the Houston location houses over 2,600 employees and is the company’s largest employment hub.

The HT Group reported in January 2019, “In one year’s time, 1,800 companies left California and most made Texas their destination.” The Hoover Institution added in September:

Not surprisingly, California businesses tend to relocate from the counties with the highest taxes, highest regulatory burdens, and most expensive real estate, such as San Francisco, and they tend to relocate to states where it is easier to prosper. Texas imposes just a 0.75% franchise tax on business margins, compared to California’s 8.85% corporate tax. …Not to mention that Texas has no individual income tax, compared to California’s current top rate of 13.3%, which may rise to 16.3% soon, and which would apply retroactively.

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