Apple Gives Employees Cutthroat Ultimatum: Move from California to Texas or be Terminated

However, Apple recently announced that an entire division based in San Diego will be shut down in April 2024. For those working there, they have two options: move to Austin, Texas, or be let go. 

By 1993, the company had expanded and opened its first-ever corporate headquarters just miles from the garage in Cupertino, outside of San Jose, California. By 2017, Apple had opened a second, larger headquarters known as Apple Park, but they never left Cupertino. 

These so-called “dot-com” startups surged in California, causing a redefining of the Californian identity. California became synonymous with tech and innovation. Apple became one of the cornerstone pieces of this new tech identity as it continued to push out innovations in the 2000s.

But Apple just announced that one office in San Diego, California, made up of 121 employees, will be shutting down this year, and it gave those employees quite the ultimatum. 

The 121 employees all work for Apple’s Data Operations Annotation team. They focus on AI development and, specifically, Apple’s assistant, Siri. 

And Apple has promised that they can keep their jobs and continue to do the same important work, as long as they’re willing to do so from Texas. 

The San Diego employees who were affected by this decision were certainly surprised by it. Shortly before the announcement was made, they were supposedly told they would only be moving to another office within San Diego, but now, they have to move more than 1,300 miles away to keep their jobs.

Those who decide they don’t want to leave San Diego will be terminated with four weeks of severance, as well as an extra week for every year they’ve been with Apple. Furthermore, their health insurance will continue for an additional six months.

So it seems that this move is really about cohesion and efficiency, not about shutting down the San Diego Office. And even if the majority of Apple employees decide to move to Austin to keep their jobs, only about 100 employees will be relocated, which wouldn’t make a significant dent in the San Diego offices.

While their jobs could be done from home, many big tech companies are insisting that workers come into the office at least several days a week. After the pandemic got people used to working from home, the transition has been difficult to adjust to for some.

Bank of America recently threatened its employees with “Letters of Education” to try to strong-arm these workers to come back to work regularly.

They were seemingly interested in trying out a hybrid work model and experimenting with augmented reality technologies to supplement the in-person interaction gap. Looking at this latest decision from Apple to threaten workers with relocation makes it apparent just how the conversation has shifted in a short time.

According to Apple’s website, they are planning to continue extensive growth in San Diego, not downsizing as it may seem. The website says, “We’re looking forward to long-term growth in San Diego, with a goal to reach 5000 employees by 2026.”

In just the past year, tech giants Google, Amazon, SpaceX, and Tesla either moved their headquarters or massively expanded their offices in Austin, Texas. Even Apple themselves expanded its operations in Texas during 2023, a trend that doesn’t seem to be slowing down.

In addition to the hundred or so employees they’re sending to Texas, Apple also reported, “We’re growing our campus [in Austin] to welcome thousands more. The plans include covering over 60 percent of the property with landscaping so you can stretch your legs or clear your mind in lush, green spaces.

As Google moved in jobs and real estate development followed suit. Companies moved in to start providing housing to the estimated 10,000 jobs that Apple’s decision would create. Local businesses also appreciated the boost to traffic. This investment reportedly cost Google around $9.5 billion dollars.

TikTok already has offices in the city of Austin but submitted a filing for the construction of additional floors of Tower 300 Colorado. TikTok is currently headquartered in California but it seems to have its eyes set on Austin. The project is estimated to cost $17 million.

With economic opportunities come businesses whose mission is to make the most money for shareholders. When more big names move into the area, it drives further interest in the state, boosting the economy even higher.

If a wealth tax is successful, it would burden tech companies, which already make up a substantial share of tax revenues. The rich people in California would be tempted more than ever to leave the state.

The Legislative Analyst’s Office (LAO) estimates that just the four largest tech companies in the state contribute more than 6% of the state’s income tax withholding. This is an incredible number that has doubled since 2016 and quadrupled in the past 10 years.

The LAO estimates that the 2024-2025 California fiscal budget will be short to the tune of $68 billion, which is double what it was the previous year.

Computer World reported earlier this month that Apple plans to have nearly 1 billion AI-equipped smartphones shipping out with generative AI by 2027. It has a lot of work to do to catch up with ChatGPT and Microsoft Copilot.

But it does come at the same time the company is facing a real problem. Apple is currently being forced to stop selling its recently developed smartwatches as, apparently, the company used patented technology from biotech company Massimo to make them. 

But it’s crucial to understand that Apple, even with all of these issues at hand, is still worth a whopping $2.96 trillion. For a company so large, moving employees around, selling fewer phones than planned, and even a decline in share price won’t really affect the behemoth.