Why don't companies GTFO of silicon valley?

Microsoft ivanka
Jan 10 29 Comments

High af cost of living and they have to pay 50% more TC, so why do these idiots all open offices there?
Don't give me the "there's access to talent there" bullshit since 99% of SV nerds weren't born there. Makes 0 sense to me.

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TOP 29 Comments
  • Google / Eng poogers
    Weather's nice, people want to live in the Bay Area.
    Jan 10 9
    • Microsoft ivanka
      OP
      At least go 100 miles away, same weather.
      Jan 10
    • LinkedIn vfgh215
      No one wants to live there if there is no one else there. Chicken or egg scenario.
      Jan 10
    • Apple / Eng Apple Park
      Given a choice, I believe many people would prefer to live outside of the Bay Area. It has more to do with hoards of people - the area itself is wonderful (not necessarily SV proper, but all of the surrounding areas).
      Jan 10
    • Microsoft ivanka
      OP
      Silicon valley was a shitty desert in the 70s and people found a way. Chicken and egg is not an excuse. Imagine saving half on taxes/payroll. Sounds like a good business decision to gtfo
      Jan 10
    • LinkedIn vfgh215
      Would you move to Modesto or Stockton if Apple moved HQ there and you weren't sure who else was going to move and if all the things you needed to support your life in the area would follow?
      Jan 10
    • Apple / Eng Apple Park
      100% yes. If other companies did similar things to reduce the pressure in the immediate Bay Area (e.g. Google moves to Gilroy).
      Jan 10
    • LinkedIn vfgh215
      But you don't know who will follow. That's the whole chicken and egg thing. Hoards of people need to move before it becomes viable. You said it yourself.
      Jan 10
    • Apple / Eng Apple Park
      We’re talking about a hypothetical situation where companies actually try to solve the problem (Apple to Stockton, Google to Gilroy, Facebook to Santa Rosa, etc.). If we’re not spreading people out in our hypothetical (which solves the biggest problem of the Bay Area) then it’s pointless to debate anything.

      Sure, if Apple moved to Stockton, inevitably others would follow, but I don’t think people in the Bay Area realize how packed in things are there. It shouldn’t ever take you 1.5 hours to go 7 miles between work and home. Ever!

      But I agree with the OP - well established companies should get out of the Bay Area entirely. There’s nothing special for them there anymore, other than being a nice place for the 1% of their company to live.
      Jan 10
    • Amazon ChiknTikka
      Lower risk to move incrementally - to San Jose from MV for example. More likely to see companies converting old industrial space in East Bay to office/commercial, much lower risk and better workforce access vs moving to Gilroy. Better off opening in Austin than Gilroy.
      Jan 10
  • Uber / Eng DgoQ22
    Precisely because all the talents move here. I was offered a job at seattle for amazon but declined it because no way I am moving there. At places like Seattle you are at the mercy of a few tech companies. In Silicon Valley, you can just walk a block down and find another job your current one don’t work out. So yes, it’s precisely a talent issues.
    Jan 10 3
    • Facebook / Eng
      BmSC45

      Facebook Eng

      PRE
      Google
      BmSC45more
      Huh what? If you’re in another city and want to switch jobs, just take a flight for the interview. They usually pay for it anyways.

      Paying more taxes and high living costs for an area consisting of a garbage filled city, rapidly losing talent, and consisting of a homogenous culture is by all accounts unintelligent.
      Jan 10
    • Amazon ChiknTikka
      Seattle seems to have changed, opportunity there is a lot better than 5 years ago. Startup scene still pretty pathetic though. I would consider moving there if not for my kids and the fact that Amazon has noncompetes in Washington state which is serious bullshit.
      Jan 10
    • VMware BobbleHat
      Once you get a house filled with sht moving is an external pain.
      Jan 11
  • Intel did this in the 80s and 90s by opening up Folsom CA, Hillsboro OR, and Chandler AZ sites. Each of these sites are as big or in the case of Hillsboro, much bigger than the original Santa Clara campus. Also, the crown jewels -- big core chip architecture -- is the domain of the Israel Design Center, which also is bigger than Santa Clara. Most low cost/mature stuff is handled in Bangalore. So Intel, one of the reasons why Silicon Valley is named as such, is not really a Silicon Valley company anymore. Part of the reason was to save on the labor cost and to lock down talent in those low cost of living (LCOL) places. Basically once a person puts down roots and starts a family in those places, they find it hard to move since there are no other well paying companies to jump to. To this day, only Santa Clara and Boston (I think) gets a "geo adjustment" salary adder to your base salary that is indexed to your grade (it tapers off as you get more senior, like at grade 9). Similarly, you see a demographic shift around the early 90s to where Intel Santa Clara has become majority Indian because of the reliance on more H1Bs, another way to lock down people and discourage them from job hopping. So now Santa Clara is like 70-80% Indian. Cisco and eBay nearby also have similar demographics.

    Intel does this so they don't have to pay above average market rate, but this strategy of avoiding paying for the best talent has contributed to Intel decline in technological prowess -- see our 10nm, mobile, and other failures. I personally know PhDs who worked on fab tech in OR who just studied ML and data science on the side to GTFO to FANG. It's gotten to the point where even some kids from our feeder schools (SJSU, ASU -- not exactly world class institutions) have been turning down offers to work at Intel Santa Clara because the pay isn't competitive.

    Recently companies like Apple and Nvidia having been also opening up shops in nearby LCOL and many Intel vets with transferrable skills have been leaving to greener pastures.
    Jan 10 2
    • Microsoft ivanka
      OP
      Why doesn't Intel just pay more? If they can't afford to pay more in Oregon / Santa Clara what makes you think they could afford to be in Bay Area? Are you assuming a company is automatically richer just by being in SV?
      Jan 10
    • Amazon / Eng 工口
      Monopoly, because they had an attitude that they think it is still 90s, and people will join Intel and Cisco regardless of how little they pay.
      Jan 10
  • Because the talent is here.

    I wish I could leave this shit California state and keep my SF salary. The taxes are way too high and a lot of Government fiscal waste.
    Jan 10 1
    • Microsoft ivanka
      OP
      All that "talent" moved in. They can move out
      Jan 10
  • Amazon / Eng 工口
    First of all it is not 50% more TC, second of all the people they want to hire may go to a competitor instead of moving to Austin or Seattle to save a few bucks.

    My family is here and I bought my house 20 years ago. Why should I leave for a company who couldn't afford to stay here?
    Jan 10 0
  • New
    iIIuminati

    New

    BIO
    I make stuff and I’m super into it.
    iIIuminatimore
    They are. Austin texas is the next tech bubble.
    Jan 10 0
  • Cruise Automation newstar
    Weren't born there, they came from all over the world to be there. That's a lot of talent.

    And companies already are expanding, where have been to not see that? Austin, Seattle, NY, Boston, CO.
    Jan 10 0
  • Facebook newkidz
    Yeah i wonder why the many many companies that made billions in silicon valley are such "idiots" and dont follow suit on the many unknown companies out of here.
    Jan 10 0
  • Facebook djdkslwhx
    A lot of these answers ignore what I see as a huge factor, access to VC funding
    Jan 10 2
    • Microsoft ivanka
      OP
      What about public companies? Too big/lazy to move? And why don't don't VCs gtfo SV, do they really like their investment money going to taxes and overinflated rents and TCs?
      Jan 10
    • It’s simple. Startups in SV have much greater returns on VC money than anywhere else. Many founders have previous exits. They have a much higher chance of success than some nobody in the Midwest.
      Jan 12
  • Intel &&-9jj
    Because their products typically have gross margins over 60%.

    Also, for startups theirs access to capital.
    Jan 10 0
  • Clover Health / Eng doenfh
    Anyone know what tax incentives there are in SV?
    Jan 10 0
  • Apple / Eng Apple Park
    I agree.
    Jan 10 0

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