Chevron, Tesla, Oracle and More: 11 Companies That Have Left California and Why

A growing number of high-profile companies, including Chevron, Tesla, McKesson, Charles Schwab, CBRE, Hewlett Packard Enterprise, Palantir, AECOM, FICO, SpaceX, and Oracle, have relocated their headquarters from California to other states such as Texas, citing high costs, stringent regulations, and lifestyle challenges.

According to a 2025 report, only 3% of California firms relocated out of state; however, larger corporations are likely to leave, sparking concerns about the state's economic future.

Economic Pressures Driving Exodus

California's high cost of living and tax rates are the key factors pushing companies away. Chevron, a California native since 1879, announced on 2 August 2024 its move to Houston, Texas, citing restrictive policies.

'While our relocation has very real benefits to our business, we also believe California policymakers have pursued policies that raise costs and consumer prices, creating a hardship for all Californians,' Chevron spokesperson Ross Allen told Business Insider.

The company, employing 2,000 in California compared to 7,000 in Texas, expects to complete its transition by 2029, saving an estimated £150 million ($201 million) annually in operational costs. Tesla, which moved to Austin in 2021, faced similar issues.

CEO Elon Musk highlighted housing costs and spatial constraints, stating, 'There's a limit to how big you can scale in the Bay Area.'

A 2021 Hoover Institution report noted 74 corporate headquarters left California in the first half of that year alone, with many citing affordability as a primary concern.

Regulatory Challenges and Political Climate

California's environmental regulations and legislative policies have also driven relocations.

Chevron faced lawsuits from the state in 2023, accused of downplaying the risks associated with fossil fuels, prompting its exit. 'The policies in California have become pretty restrictive on a lot of business fronts,' Chevron CEO Mike Wirth remarked in 2019.

Similarly, Musk cited a 2024 bill signed by Governor Gavin Newsom, which barred schools from informing parents about students' gender identity, as the final straw for Tesla and SpaceX's departures.

X posts reflect public sentiment: @TCNetworkFans stated, 'It's no wonder why American citizens and businesses, like Tesla, Chevron, Oracle, HPE, Charles Schwab, etc., are leaving California in droves.'

Similarly, X Post from @DC_Draino mentioned, 'Chevron is one of the biggest and most successful companies in the world & they've been headquartered in California for 145 years, but no more - they're moving to no-state-income-tax Texas.'

Oracle, which relocated to Austin in 2020, sought flexibility for its employees, although it retains nearly 6,900 workers in California—roughly three times its staff in Texas.

A 2025 report by the Public Policy Institute of California found that 1.9% of the state's 47,000 headquarters left between 2011 and 2021, representing 77,600 jobs, primarily in manufacturing and business services.

Impact on California's Economy and Image

While high-profile exits, such as Chevron's, grab headlines, their economic impact is nuanced. California's economy, valued at £3 trillion ($4 trillion), remains robust, with expansions by companies like Visa and Nintendo.

However, company relocations are on the rise, raising concerns about the state's business climate. 'It's an embarrassment for California that we've lost so many global companies because of misguided policies,' said Jim Wunderman of the Bay Area Council.

Tesla, despite relocating its headquarters, had grown to 47,000 employees in California by 2022, suggesting that some firms maintain significant operations.

The state also saw 700,000 residents leave between 2022 and 2023, driven by lifestyle and affordability issues, per US Census data.

As Texas lures firms with low taxes and a reasonable regulatory environment, California faces pressure to adjust its policies to retain companies by ensuring favourable conditions, including ease of doing business and providing positive experiences.