Austin’s reign as a tech hub might be coming to an end

AUSTIN – The Wall Street Journal reports that nearly five years after Austin, Texas, became a darling of the tech industry, luring companies out of California with the promise of lower taxes and a better quality of life, the city is now bleeding tech talent that is flowing back to the coasts. A new report from venture-capital firm SignalFire shows that in 2024 Big Tech employment declined 1.6% in Austin, and startup employment fell 4.9%. Tech employment in Dallas and Houston also declined, along with cities like Denver and Toronto. Tech employment grew, on the other hand, in New York and San Francisco. It is a shift from five years ago, when Texas seemed like a growing Sunbelt beacon for tech, luring companies like Tesla, Hewlett Packard Enterprise and Oracle from California, and inspiring a number of remote tech workers and startups to follow them. But many of those companies have since laid off workers and Oracle actually relocated from Texas to Nashville, Tenn. “I think that promise was never realized,” said Asher Bantock, SignalFire’s head of research. “This idea that it would become a new startup hub didn’t materialize.”

Return-to-office requirements combined with the burgeoning artificial-intelligence industry centralizing in Silicon Valley drew workers back West, while Austin’s fluctuating living costs and outdated infrastructure left new transplants frustrated, Bantock said. Gabriel Farid Guerra said he was extremely underwhelmed after moving to Austin from New York in 2022. Working a completely remote job at the time, he said he signed a one-year lease in the city, chasing the idea that it was “the new, booming U.S. tech hub.” Compared with New York and San Francisco, he said, tech events were harder to find, the quality of events was lower and opportunities for new roles were sparser. Public transit also left something to be desired, he said. He broke his Austin lease after six months, and after bouncing to Boston and Washington, D.C., Guerra moved to San Francisco. He recalled that when he was living in D.C., he was asked in which regions his then-employer, startup Antithesis, should promote its software product. “They gave me a list of cities and asked me about Austin, and I said, ‘No, not Austin. It’s kind of dead.,” he said.