Kara Carlson, Lori Hawkins and Bob Sechler | Austin American-Statesman | 5:58 pm CST December 11, 2020
In another win for Central Texas' surging technology sector, software giant Oracle confirmed Friday that it is moving its corporate headquarters from Silicon Valley to Austin.
“Oracle is implementing a more flexible employee work location policy and has changed its Corporate Headquarters from Redwood City, California to Austin, Texas. We believe these moves best position Oracle for growth and provide our personnel with more flexibility about where and how they work,” the company said in a written statement.
Oracle, the second-largest software company in the world, did not immediately provide a timeline for the formal move, or say how many jobs it might bring to Austin. Oracle’s current Austin workforce is estimated at about 2,500 people, according to the Austin Chamber of Commerce.
"While some states are driving away businesses with high taxes and heavy-handed regulations, we continue to see a tidal wave of companies like Oracle moving to Texas thanks to our friendly business climate, low taxes, and the best workforce in the nation," Gov. Greg Abbott said in a written statement.
Abbott's office said the state didn't provide any financial incentives to encourage Oracle's move to Texas.
"Welcome home, Oracle! Austin yet again contributing to economic development in Texas," Austin Mayor Steve Adler wrote on Twitter.
Laura Huffman, president of the Austin Chamber of Commerce, called the news a huge “holiday present for Austin,” saying the chamber has worked with Oracle in the past but didn’t learn about its relocation plans until the company announced the move Friday afternoon.
“I think obviously we can expect to see new jobs in Austin,” Huffman said. “Whether or not the chief executive moves to Austin, I think that remains to be seen. But generally, when people announce headquarters, there are a lot of core functions for these large businesses” that come with them.
The move by Oracle comes on the heels of the July news that Tesla would build a $1.1 billion Austin area manufacturing facility that could employ as many as 5,000 people. It also follows announcements in the past three years of expansion plans by Apple and other technology companies.
Wedbush Securities analyst Daniel Ives said Austin is likely to continue to be among the top destinations for technology companies leaving the Silicon Valley, a trend that has increased in recent months amid the pandemic: “This is a clear trend of more tech stars moving out of the Valley to other locations.
“Austin’s front and center. Tesla’s led the charge. And it's really becoming a core technology hub, because of the engineering community and a lot of the startups that have succeeded in Austin over the last decade, with many of them coming in at Dell,” Ives said. “Austin's really become the Goldilocks location for companies moving out of the Valley."
Austin economist Angelos Angelou called the Oracle news "a huge development for Austin's future."
"It follows the recruitment of Apple and Tesla and other companies that are really going to guarantee Austin a decade of significant growth, the likes of which we've never seen before," he said.
While tech giants — including Facebook, Google and Amazon — have expanded in Central Texas, for a company to move its corporate headquarters here "is a huge boost to the region's global reputation as a high-tech center," Angelou said.
Oracle relocating to Austin "puts us ahead of the game, and I'm pretty sure it's going to be followed by others. The business climate in Texas compared to California as well as our highly skilled tech talent will keep them coming," he said.
Even if Oracle doesn't move hundreds of workers to Austin immediately, the company will concentrate its hiring future here, resulting in a wave of new talent. Some of those workers will eventually leave to start their own companies, fostering a new wave of startups, he said.
"No matter how many jobs they bring here, it's the corporate headquarters and that's a marquee event," Angelou said. "From an economic development standpoint, this is really fantastic news that's beyond anyone's imagination."
Amber Gunst, CEO of the Austin Technology Council, said Oracle's decision is a big win for Austin.
“This move is a great win for Austin and the incredible team Oracle has built in our community,” Gunst said in a written statement. “The level of executive talent that will join the local campus will have a significant influence not only on the growth of Oracle employees, but to other leaders and companies in the tech community through mentorship, sponsorship, and thought leadership,”
Business-friendly policies in Texas helped encourage Oracle to make the move, said Patrick Moorhead, a technology analyst and founder of Austin-based consulting firm Moor Insights and Strategy.
"Texas has fostered a jobs-friendly environment with lower taxes, lower cost of living and less red tape to create and run businesses. California, on the other hand, is headed in a different direction. When you add in an educated Austin population base, the city is a natural destination," Moorhead said.
Moorhead said he also expected the move would result in additional jobs coming to Austin.
"I believe this will translate to increased Austin headcount for Oracle. At a minimum, we will see more HQ staff move to Austin from California," he said.
Waco-based economist Ray Perryman said that as an industry leader, "the fact that Oracle has chosen to headquarter in Austin is further indication of the area's continued emergence and establishment as a center for multiple technologies."
The advantages of an Austin location in terms of the quality of the workforce and business climate "are hard to beat," he said.
"The location will ultimately offer opportunities for Texans across a spectrum of job types, both onsite once the pandemic is dealt with and remotely," Perryman said. "It will also create synergies for additional activity."
Oracle already has a significant presence in Austin. In 2018 it opened a five-story, 560,000-square-feet campus overlooking Lady Bird Lake in Southeast Austin.
At a ribbon-cutting ceremony at the time that facility opened, Oracle co-founder Larry Ellison said he expects the corporate campus in Austin to grow to as large as 10,000 employees.
"We have big plans," Ellison told the crowd in 2018. "We have a handful of hubs in the United States, and Austin is one of the key places we want to be because that's where we think our people want to be."
Oracle's sleek Austin campus was designed to attract recent college graduates. It includes outdoor terraces with views of downtown, a fitness center, "huddle rooms" and a "tech bar" to give employees the ability to get their computers and devices repaired quickly.
Along with its original land purchase, Oracle bought a new apartment complex, called Azul, just steps from its new office building as a housing option for its employees. The apartment acquisition marked the first time Oracle bought an apartment building on an Oracle campus.
The campus, an investment of hundreds of millions of dollars, is expected to be transformative for a part of town along East Riverside Drive that is rapidly gentrifying with hundreds of new luxury housing units.
Oracle in recent years has worked to attract young talent as it shifted its focus to the cloud and built hubs for those sales groups.
Employees in the Austin campus's first phases were working mainly in sales-oriented jobs for its cloud services, a business unit Oracle has expanded globally. The jobs include direct selling, lead qualification, prospecting and technical support.