Another year, and a similar pattern continues: Many California businesses keep leaving.
Despite claims by California Gov. Gavin Newsom that California is “the beating heart of the American economy,” companies keep relocating. Their primary destination is Texas.
More than 360 companies have exited California since 2018, according to the California Policy Center’s California Book of Exoduses, which tracks corporate exits from California. Since 2005, more than half that left had relocated to Texas by 2023, The Center Square reported.
Among those exiting this year was Global tech company Simplilearn. Relocating from San Francisco to Plano, “one of the most dynamic tech communities in the United States,” was “a key contributor to its revenue,” Krishna Kumar, Simplilearn’s founder and CEO, said. Moving to Texas in October marked “a pivotal moment in our journey, driven by our commitment to being at the forefront of a thriving tech ecosystem and tapping into a diverse talent pool.”
Resources Connection Inc., a management consulting firm, relocated its headquarters from Irvine, California, its headquarters of nearly 30 years, to Dallas on Nov. 1.
Medical device company Koya Medical, Inc. relocated its headquarters to Dallas from Oakland, expecting to create more than 200 new jobs. It received financial incentives from the Dallas City Council to do so.
ABBYY, a data analytics and AI company, relocated its global headquarters from Silicon Valley to what is now known as Silicon Hills in Austin. “Relocating our headquarters to Austin, where our product leadership team already is, places us at the heart of a growing tech ecosystem,” Ulf Persson, ABBYY’s CEO, said. The company began operating in California in 1999 and its headquarters in Silicon Valley in 2019.
FreshRealm, a meal kit company that fulfills and produces meals for retailers like Amazon, Kroger, Blue Apron, and others, relocated its headquarters from California to Lancaster, Texas. It broke ground in 2023 on an 88,000 square foot space to expand operations in Texas, which offers a “rich heritage of hard work” in a “dynamically growing region that is actively investing in its people and businesses,” its president, Snow Le, said.
At the beginning of the year, Graze Inc., a California robotic lawnmower firm, announced its move to Plano, “home to some of the world’s most innovative companies …” and “the epicenter” of a “thriving economy.”
Companies based in other states that had operations in California also pulled them as Californians continue to face a homeowner insurance crisis. Galveston, Texas-based American National Insurance said it was pulling its homeowners insurance policies in California and other states due to “persistent underwriting losses over the last 10 years,” Insurance Journal reported.
State Farm, Allstate, AIG, Chubb, Falls Lake Insurance, AmGUARD, Tokio Marine America Insurance Co., and Trans Pacific Insurance Co. all announced they are leaving California, not writing any new homeowner insurance policies or renewing them, Insurance.com reported.
Every year, as California ranks last or near last, Texas ranks first as the best state for business, for attracting new businesses, first for job creation, job growth and economic expansion, The Center Square has reported.
In 2023, Texas gained 500,000 residents, with the most – more than 102,000 – coming from California, according to Census data. People are flocking to Texas because it has no personal income tax, a state government that supports law enforcement, its businesses are leading the U.S. in job creation and growth, and its economic expansion dominates, Gov. Greg Abbott argues.
Until 2020, California reported population gains every year since 1900. Under Newsom, California for the first time since 1850 reported its first population loss, according to Census data.
Despite Newsom’s office recent claim that people were flocking to California, data shows the opposite: California remains the top state for exits, The Center Square reported. Businesses and residents are leaving California citing high taxes and unaffordable housing conditions, among other concerns.
Outmigration has cost California. In 2021 and 2022, California lost $24 billion in outgoing personal incomes, according to IRS data, The Center Square reported.
