Social media company X plans to close its San Francisco office “in the coming weeks,” according to an internal email sent by CEO Linda Yaccarino early today. “This is a significant decision that will impact many of you, but it is the right decision for our company in the long term,” Yaccarino wrote in the email, which was first reported by The New York Times.
San Francisco employees will reportedly be relocated to new locations in the Bay Area, including “our existing offices in San Jose and a new shared space in Palo Alto focused on engineering” (with Musk’s AI startup xAI), the memo said. The company’s management is said to be working on “mobility options” for staff. X did not respond to WIRED’s request for comment.
The official announcement comes just weeks after Musk revealed plans to move SpaceX and its headquarters to Texas in a post about SpaceX. At the time, Musk said SpaceX would specifically move to Austin. Bloomberg reported earlier this year that SpaceX had already launched an Austin-based SpaceX trust and safety team.
Texas is known to be more business-friendly than California and has one of the lowest tax burdens in the U.S. But Musk’s publicly stated reasons for moving to Texas were more ideological than financial. At the time, Musk said he felt California’s new law aimed at protecting the privacy of transgender children was the “final push” and “attacked both families and businesses.” He also said he was “tired of dodging gangs of violent drug addicts just to get in and out of my building.”
Yaccarino’s latest report suggests that it’s specifically X’s San Francisco office that’s causing problems for the company. This is a 180-degree turn for Musk, who tweeted a year ago that X wouldn’t move its headquarters out of San Francisco, despite incentives to do so. “It’s only when you’re in a bind that you realize who your friends are.” He waxed poetic about X.“San Francisco, beautiful San Francisco, we will always be your friends, even when others have abandoned you.”
The closure of the X office marks the end of an era for the company formerly known as Twitter, and for the historic Mid-Market neighborhood, which successfully attracted fast-growing tech companies in the 2010s, including Twitter, Uber, Spotify and Square.
Twitter’s first offices were in San Francisco’s SoMa, or South of Market, neighborhood, but in 2011 then-Mayor Ed Lee enacted a controversial tax break for tech companies that eliminated a 1.5% payroll tax for companies that moved into certain buildings in the Mid-Market neighborhood. Twitter jumped at the opportunity.
The company had been considered an anchor tenant in a densely populated area plagued by homelessness and open drug use. Suddenly, Market Street was dotted with breezy upscale food markets, Blue Bottle coffee shops, techies wearing MacBooks and expensive sneakers, and a variety of struggling people camped out in front of still-vacant storefronts.
