hp Enterprise Moves Headquarters to Texas for Cost Reduction
76-Year-Old HP Still Maintains Palo Alto Headquarters
[Asia Economy Reporter Kwon Jae-hee] Hewlett Packard Enterprise (HPE), which provides enterprise cloud services, is leaving Silicon Valley. This move is seen as reflecting changes in the working environment of IT companies following the COVID-19 pandemic.
According to the Wall Street Journal (WSJ) on the 1st (local time), HPE announced plans to relocate its headquarters from San Jose, California, to Houston, Texas.
HPE stated, "Houston, the largest employment hub in the United States, is an attractive place to secure diverse talent," adding, "It is also advantageous for recruiting and retaining talent."
Local media regard HPE's headquarters relocation as a symbolic event revealing the declining appeal of Silicon Valley, long known as a cradle for IT startups. HPE was created in 2015 when Hewlett-Packard (HP), the first company to grow from Silicon Valley into a global enterprise, split into enterprise cloud business and personal computer business. It was truly a mainstay of Silicon Valley.
Silicon Valley companies have suffered from high housing costs and taxes. However, since the COVID-19 pandemic became widespread this year, remote work has become common, accelerating the exodus of IT companies. The perception is that there is no reason to stay in Silicon Valley while bearing expensive housing and taxes. HPE also felt the need to reduce costs after experiencing COVID-19 this year.
Antonio Neri, CEO of HPE, said, "We have listened to employees who say they want to spend less time in physical workplaces," and added, "We are reevaluating our strategy to prepare for this new future of work."
Charles King, head of Fund IT, commented, "It is a sad day for Silicon Valley but a day full of hope for HPE and its shareholders."
While companies are leaving Silicon Valley, Texas is becoming a new home for these companies. 8VC, a venture firm founded by Palantir co-founder Joe Lonsdale, has also relocated to Austin, Texas, and cloud service provider Dropbox has decided to move its headquarters to Austin. Electric vehicle manufacturer Tesla also plans to operate a factory in Austin next year.
However, HP, with its 76-year tradition, still maintains its headquarters in Palo Alto.
HPE announced that its fourth-quarter (August to October) revenue was $7.22 billion (approximately 7.93 trillion KRW), with earnings of 37 cents per share.
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