Twitter owner and Tesla CEO Elon Musk issued a non-binding response on the future of Twitter in San Francisco on Tuesday, prompting growing fears that the social media company may soon be leaving San Francisco.
Since the beginning of the decade, many well-known Bay Area companies, including Oracle, have left the city to relocate or relocate elsewhere in the state, largely due to the growing number of significant problems in the Bay Area. However, few saw Musk or his companies do the same. He was originally credited with launching Space, helped by the technology boom and the increasing popularity of electric cars.
But just a few years later, relations became strained as California’s tax rates and business laws affected the company so badly that Musk looked elsewhere. Threats of unionization and the COVID-19 pandemic that shut down his factory for months were the last straw that broke the camel’s back for Tesla and Musk.
In late 2020, Musk moved from California to tax-friendly Texas. Just a year later, Musk moved Tesla headquarters from Palo Alto to Austin. While many Tesla positions ultimately stayed in California as the automobile plant stayed and opened a new factory in Lathrop, Tesla continued to focus on California, opening more factories in Nevada and Texas and laying off hundreds of California workers. While he brought Tesla’s global engineering and AI headquarters back to Palo Alto in February, both Tesla and Musk themselves are now a long way from California.
Last year, Musk wanted to buy Twitter but was hesitant about his plans. But as pressure mounted, Musk eventually bought the company for $44 billion last April. The company suffered problems: Twitter immediately lost users, Musk laid off about 80% of its employees, and there were numerous problems setting up living quarters at its San Francisco headquarters so employees could sleep during long workdays. The San Francisco Department of Building Inspection is currently investigating the latter for violations, including allegations by employees that the company disabled lights and installed locks that would not open in an emergency.
With so many issues, the question of leaving Twitter has been a constant question since Musk acquired it in October. On Tuesday, during the Wall Street Journal’s CEO Council Summit in London, Musk made an unusually non-binding statement on whether Twitter would stay in San Francisco. This led to concern among many in the city Wednesday that San Francisco would lose a major employer and a huge tax-paying corporation.
“San Francisco is currently facing a budget deficit of $780 million over the next few years. They can’t afford to lose any more big companies,” Charlotte Welsh, a budget analyst who has worked for cities in California, Oregon and Idaho, told the Globe on Wednesday. “Musk and Twitter have great odds in San Francisco’s future right now. And as we saw with the Tesla switch, we know he’s ready to embrace it. There could be backlash from employees, such as when Disney employees refused to move from California to Florida until it was canceled entirely last week. The city could also try to block the move as Twitter is under investigation.
“However, we don’t know exactly what will happen yet. But it’s in the air now. If you told the city five years ago that Twitter was planning to move to Florida or Texas, they would just laugh at you. Today it is a big threat.”
As of Wednesday, Musk has not taken any further action on a possible Twitter move.