Tesla's decision to move its headquarters to Austin, Texas marks yet another high-profile tech departure from Silicon Valley.
In making the surprise announcement at a Tesla's annual meeting on Thursday, Tesla CEO Elon Musk cited the Bay Area's sky high cost of living which he says is making it difficult to grow the company's workforce.
With this move, Tesla is following in the footsteps of a number of other tech companies including Oracle, which shifted its headquarters to Austin last year.
"I think this trend will continue until we take action to solve the problems that are causing havoc," said Bay Area Council President and CEO Jim Wunderman.
He believes that for many companies, the cost of doing business here is simply too high. "It's hard in California compared to other states," Wunderman told KCBS Radio. "We put (in) a lot of roadblocks."
Nevertheless, Tim Higgins, journalist and close watcher of Tesla, pointed out that Silicon Valley still has plenty going for it. "The concertation of talent in that ecosystem allows for the fostering of new businesses and new ideas that's really put Silicon Valley on the map," he explained.
Earlier Friday, Gov. Gavin Newsom chimed in on Tesla's departure, painting a much less gloomy picture in praising Musk's contributions to California and lauding the state's electric vehicle prowess across the board. "He has invested untold amounts of money in this state to create thousands and thousands of jobs but more importantly he's pushed out the boundary of what's possible," the governor said of Musk's announcement.
"I was encouraged by Elon's commitment to increase production in California by 50%," Newsom added, saying he has "deep reverence and respect" for Musk and predicting that California's "best days are in front" of it.
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