SAN JOSE, Calif. - One of Silicon Valley's founding companies is moving its headquarters out of the Bay Area to Texas.
HP Enterprise has 60,000 employees globally with about 2,400 based in the Bay Area.
With more employees already in Texas, the company says it makes sense to move its headquarters there.
"I welcome Hewlett Packard Enterprise's new global headquarters to the Houston area," Texas governor Greg Abbott said in a statement posted on YouTube.
HPE is based in north San Jose and just moved into the new state-of-the-art campus a year and a half ago.
"I think the bigger blow here is that HP represents a pioneering company who helped create Silicon Valley. To see them actually move their headquarters to another state is a bit of a blow," said tech analyst Tim Bajarin.
Effective immediately, HPE is moving its headquarters to Spring, Texas which is a suburb of Houston.
The company plans to consolidate some Bay Area sites but keep the new San Jose campus as an innovation hub for another portion of its business.
An HPE rep says there will be no layoffs and employees will have the option to stay in the Bay Area or move.
"The high cost of living in California (and) the taxes. A lot of companies have started to look at moving at least some of their business locations. And in some cases headquarters. Like VOX just moved there's to Austin," said Bajarin.
The company's future Houston-area headquarters was already under construction and is set to open in 2022.
Texas' governor in a released video touted his state for having the "best business climate in America."
"Our low taxes, high quality of life, top-notch workforce and tier one universities create an environment where innovative companies like HPE can flourish," said Gov. Abbott.
The other company created when Hewlett Packard split into two companies is HP Inc.
That printer and computer company remains headquartered in Palo Alto.
HPE becomes the latest in a growing list of tech companies moving at least a portion of the workforce out of the Bay Area.
The CEO of HPE says the move comes during the COVID era, as employees have indicated they want to spend less time at a physical worksite.
The company is also launching new remote working options to give employees the flexibility they're asking for.