Apple, like most of the tech giants in the U.S, has its headquarter ‘Apple Park’ in Cupertino, California. However, the high living cost of Silicon Valley ( San Francisco Bay Area in Northern California) is draining the region of talent. And foreseeing the difficulty in ” hiring and retaining” competent employees, Apple is “ramping up efforts to decentralize out of Silicon Valley”.
As reported by Mark Gurman of Bloomberg, Apple’s decentralization plan includes domestic and international expansion. Apple’s online service chief, Eddy Cue is investing in multiple Los Angeles offices and a location in Nashville. Similarly, Jeff Williams, Apple’s chief operating officer, “is discussing the cost benefits of a more global workforce, and Deirdre O’Brien, the retail and HR chief, has evangelized for the diversity benefits.”
Reasons for Apple’s move out of Silicon Valley
Mark Gurman of Bloomberg reports that the Cupertino tech giant has been contemplating moving out of Silicon Valley for years. Although the top leadership opposed the decision previously, several changes in Silicon Valley have made them support the move.
- Extremely high cost of operations.
- Extraordinary high living cost in the San Francisco Bay Area, California. Valuable and high-earning employees complain they can not “balance living expenses with other pursuits like college tuition for their children and long-term savings.”
- Difficulty in finding a diverse workforce.
- The company needs to be present in places where talent lives today, rather than wait for it to come to Cupertino.
Another impetus for decentralization from the tech hub is the successful branching out of senior executives in other cities and countries. Apple’s head of custom silicon, Johny Srouji’s “group opened up offices in Florida, Massachusetts, Texas, Israel and parts of Asia years ago. It has since expanded in Germany, Oregon and San Diego.”
Now that the “decentralization across the company is entering full swing”, the company is expanding Pacific Northwest of Oregon and Washington, the Rocky Mountains of Colorado, Iowa’s Midwest, the Eastern Seaboard of Massachusetts, Miami, and New York. In addition, Cupertino tech giant is spending $2 billion on new campuses in Austin, Texas, North Carolina. This is part of Apple’s $430 billion investment plan over five-year to strengthen the U.S economy
Globally, the company is hiring engineers in Canada, Germany, Spain, the U.K, and New Zealand. Therefore, it is estimated that the move will create a larger talent pool by providing tens and thousands of jobs “outside of Silicon Valley.” Maybe, offices in Russia are also part of the expansion plan because the Russian legislator is about to pass a new law that will compel Apple and other U.S tech companies with more than half a million daily users to open local offices in the country by January 2022. Previously, the company announced $1 billion euros investment in Germany for the development of its European Silicon Design Center’ in Munich to focus on 5G and future wireless technologies.
The company is planning its move to out the valley at a time when a group of employees is concerned with its new back to offices ‘hybrid work‘ model, starting in September. The employees are requesting ‘remote work’ indefinitely like Google and Facebook. In addition, the company is going to test a ‘Retail Flex‘ hybrid work pilot for Apple Store employees to accommodate an increase in online shopping. To receive exclusive ‘Power On’ newsletter, click here.