Elon Musk's X is leaving its San Francisco HQ for Texas, but the city's officials say ‘good riddance’: Report
Elon Musk’s X leaves San Francisco and plans to set up a new headquarters in Texas due to unfavorable taxation policies as well as concerns of crime
Elon Musk is closing the headquarters of his social media company X (Formerly Twitter) in its San Francisco downtown neighborhood, the New York Times reported, adding that San Francisco officials, including ones that backed a tax break that lured the company there in the first place, are far from heartbroken.
The last employees there will be moved to offices in Palo Alto and San Jose, while Musk sets up new headquarters in Texas.
Why is X leaving San Francisco?
Elon Musk stated that San Francisco’s gross receipts tax, which taxes local businesses for all transactions taking place outside city limits unfairly penalizes businesses involved in processing payments, which is something he says X will do.
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He also posted online in July that he was stuck in the company's garage “because a gang was doing drugs in the street and wouldn’t move!”
What was the reason for X to stay in San Francisco till now?
Though Twitter was founded in San Francisco in 2006, it had plans to move to Brisbane, California, where payroll taxes wouldn't be levied.
Ed Lee, San Francisco’s then mayor proposed a tax break due to the city's nearly 10% unemployment rate, where the 1.5% payroll taxes would be erased on new hires for some companies.
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This tax break ended in 2019, and when the pandemic came, the offices emptied with Twitter's co-founder Jack Dorsey and its then CEO announcing employees could work from home forever.
Why are San Francisco officials indifferent to X leaving the city?
San Francisco's attorney David Chiu, who had even backed the tax break as a member of the city’s Board of Supervisors said, “I share the perspective that most San Franciscans have, which is good riddance.”
The city's chief economist, Ted Egan, said that X's departure wouldn't matter much since, “in many respects, they were already gone,” pointing to the fact that X had shrunk a lot already, with Musk laying off many employees after his 2022 acquisition of the platform. The headquarters had already become a ghost town at this point.
Similarly, San Francisco's Mayor London Breed said, "I’m not going to beg anybody,” adding that she thought Musk’s political agenda drove him out of San Francisco.
