Apple Plans a New $1 Billion Major Expansion in Austin, Texas!

Dear Commons Community,

Apple announced yesterday that it would build a new $1 billion campus in Austin, Tex., where it could eventually employ 15,000 people.  This amid a broader expansion that will create thousands of jobs in several American cities.  The company, which has 90,000 workers in the United States, also plans to open 1,000-worker operations in San Diego, Seattle and Culver City, Calif., and add hundreds of employees in offices in New York, Pittsburgh and Boulder, Colo., in the next three years.  As reported by the New York Times:

“Apple is proud to bring new investment, jobs and opportunity to cities across the United States and to significantly deepen our quarter-century partnership with the city and people of Austin,” Tim Cook, Apple’s chief executive, said in a statement.

The move coincides with those by other technology giants to expand beyond their West Coast roots. Amazon said last month that it would divide a planned second headquarters between sites in New York and Virginia after a yearlong beauty contest, and Google is said to be considering more than doubling its 7,000-employee work force in New York.

Apple has been criticized for years for not doing enough for the American economy because it has made most of its products in China and stashed most of its profits abroad to avoid tax payments in the United States.

In January, after the company emerged as one of the biggest beneficiaries of changes in the tax code signed into law by President Trump, it said it would invest more than $30 billion in the United States over the next five years and create 20,000 jobs by expanding existing operations and adding a new campus.

A provision in the code allowed for a one-time repatriation of corporate cash held abroad at a lower tax rate than what would have been paid under the previous tax plan. Apple used it to bring back $252 billion that it had stashed abroad.

Mr. Trump, who had chided Apple over various issues in the past, reacted to the January announcement by praising the company while crediting his own policies for getting it to make the investments.

In September, though, Mr. Trump took aim at Apple again over jobs after the company told trade officials in a letter that the administration’s tariffs would affect a wide range of products.

“Make your products in the United States instead of China,” Mr. Trump wrote on Twitter. “Start building new plants now.”

None of the new positions announced by Apple on Thursday appeared to involve manufacturing.

Unlike Amazon, whose competition for a new headquarters was highly publicized, Apple has been relatively quiet about its expansion plans. The company opened its own new $5 billion headquarters in Cupertino, Calif., last year.

The tech industry’s expansion beyond its West Coast base shows the companies’ increasing importance to the American economy. As Apple, Google and Amazon add jobs and new offices around the country, companies like General Motors are shrinking and cutting thousands of positions.

The new 133-acre campus in Austin will initially employ 5,000 workers in engineering, research and development, operations, finance, sales and customer support. It will ultimately have the capacity for up to 15,000 workers. Apple said it expected that its expanded presence in Austin, where it already employs 6,000 people, would make it the area’s largest private employer.

Apple said it had applied for a $25 million grant from Texas, payable over 15 years, as well as property-tax rebates from Williamson County. Those rebates would be in the tens of millions of dollars over 15 years, said a person familiar with the application, who declined to be named because the negotiations are private.

Gov. Greg Abbott of Texas hailed Apple’s decision on Thursday as “a testament to the high-quality work force and unmatched economic environment that Texas offers.”

Cities and states are competing to lure high-paying tech jobs that can improve their economies and generate tax revenue.

But tech companies, which rank among the world’s largest by market value, carry downsides like gentrification and higher living costs that can push out longtime residents. Austin, like Seattle and the Bay Area, has experienced those effects in recent years as Apple and other technology companies expand.

Arun Sundararajan, a professor at New York University’s Stern School of Business, said the concentration of tech jobs in a few metropolitan areas was widening a gap between big cities and the rest of the country. He said the dynamic was contributing to the nation’s political divide.

“The digitalization of the economy is exaggerating the urban-rural divide,” said Mr. Sundararajan, who studies the technology industry’s role in the economy. “The part of the digital revolution that I have been waiting for, that I haven’t seen kick in in the United States, is the large platforms enabling opportunities for individuals who may not have high-tech skills.”

Apple’s announcement is a sign of the company’s strength after a financially mixed year. In August, it became the first publicly traded American company worth more than $1 trillion after a series of remarkably profitable quarters. But its stock took a hit in November after the company said it would stop reporting how many iPhones, iPads and Mac computers it sold each quarter, figures central to understanding Apple’s performance.”

Congratulations Apple and Austin!


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