Are Companies Leaving California? Not Really

Despite recent headlines about big-name companies leaving California, a new report from the
Public Policy Institute of California (PPIC) suggests there is little cause for alarm. The think
tank’s June 2025 analysis reveals that from 2011 to 2021, only a small portion—just 1.9%—of
the state’s corporate headquarters moved elsewhere.

Over the ten years, a net total of 789 headquarters relocated from California, out of more than
47,000 statewide. The majority of these departures came from firms in manufacturing, wholesale
trade, and business services. While prominent names like Tesla and Chevron drew attention for
relocating to Texas, the PPIC emphasizes that the overall numbers remain modest.

The trend of companies exiting California has increased since 2017. In contrast, the number of
firms moving their headquarters into the state declined from 137 in 2011 to 68 in 2021. Each
year, between 147 and 213 companies left the state, according to the report.

However, these figures pale in comparison to the overall business dynamics in California.
During the same period, about 7,250 new headquarters were launched—roughly 17% of the
state’s total—while 12,700 (30%) closed. According to coauthor David Neumark, a
distinguished economics professor and adjunct fellow at PPIC, those changes in launches and
closures are much more significant than the relocation numbers alone.

Neumark noted during a June 24 virtual briefing that “the focus on relocation should not be in
any way exclusive,” arguing that broader business activity is a more meaningful metric. He
added that most companies moving headquarters still maintain some level of operations or
staffing in California.

The report also examined why firms relocate. While California’s tax and regulatory climate
hasn’t shifted much over the past decade, other states have become more business-friendly by
comparison. As a result, California’s relative position has worsened, according to the study.
Texas emerged as the most popular destination for relocated headquarters, accounting for over
400 moves—more than twice the number that chose Nevada, the next closest competitor.
Florida, New York, and Arizona also appeared among the top relocation destinations.

Still, California retains strengths that continue to attract and hold businesses. These include a
well-educated, innovative workforce, favorable climate, and strong quality-of-life amenities. The
state also leads the country in Fortune 500 company presence, hosting 58 of them in 2025 and 57
in 2024. Texas and New York followed in second and third place, respectively.