Hewlett Packard Enterprise Co HPE will relocate its corporate headquarters from Silicon Valley to Houston, Texas. The announcement was made along with the release of the fourth-quarter earnings release on Tuesday.
What Happened: The tech company said it is building a new state of the art campus in Houston. HPE added that there are no layoffs arising from this move and the Bay Area facility will retain its role as an innovation hub.
Texas Governor Greg Abbot said the state remains the best place in America to do business," as he welcomed HPE, noting the potential for new job opportunities.
HPE is currently headquartered in San Jose, California but its roots can be traced to a garage 15 miles away in Palo Alto.
From a strategic point of view, HPE’s decision to shift headquarters is likely also influenced by the high costs associated with running operating from Silicon Valley, the Wall Street Journal noted.
The COVID-19 pandemic has forced companies to look for alternatives to cut down operational costs. HPE has seen a dismal performance in FY2020, reporting a net loss for the entire year.
Why Does It Matter: Texas has been wooing many tech companies, majorly in the Austin area, the Journal reported. Texas offers a cost-benefit with affordable property rentals, a comparative tax advantage as well as a diverse talent pool for hire.
A substantial number of non-technical roles could move to the new facility in Texas by spring 2022, as per the Journal.
Price Action: HPE stock closed $11.20, 1.45% higher on Tuesday.
Photo by Tony Webster on Flickr
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