The continued exodus from Silicon Valley is a warning sign for the state’s future, former Cisco CEO John Chambers told CNBC on Thursday.
“We are in trouble. We are a state that is taking a rights approach, it is not a good state for doing business,” said Chambers, who founded JC2 Ventures, in an “Squawk Alley” interview. “You are seeing a lot of companies thinking about leaving and, even worse, none of my start-ups are thinking of coming to California.”
“If California is not careful, they will lose their leadership and the jobs created with it,” he added.
Founders, executives and technology employees at all levels, who normally reside in Silicon Valley, are moving out of the area in an exodus triggered by the Covid-19 pandemic. Since they don’t go to the office every day, people are looking for cheaper rent, more space and lower taxes.
Among them is Tesla and SpaceX chief Elon Musk, who confirmed last year that he moved to Texas, although his companies still maintain their main operations in California.. Palantir co-founder Joe Lonsdale also announced a move from the Bay Area to Austin, Texas.
Some companies are also joining, moving their headquarters or allowing employees to continue working remotely long after the pandemic is over. Oracle, one of the oldest Silicon Valley success stories, has moved its corporate headquarters from Redwood City, California, to Austin, Texas. Hewlett Packard Enterprise has announced that it will move its headquarters from San Jose, California, to Houston, Texas. Data analysis software company Palantir Technologies has also moved its headquarters to Denver, Colorado, from Palo Alto, California.
Hordes of founders and investors, including Keith Rabois, also recently moved to Miami, partly due to Mayor Francis Suarez’s huge push on Twitter.
The exodus from Silicon Valley may bode well for other states in the United States that may enter wealth, Chambers said.
“Does this opportunity create opportunities for Texas, North Carolina, Ohio, my home state, West Virginia? Certainly,” he said. “You have to create the right environment for start-ups and we learned that with the pandemic, you can put your resources anywhere.”
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