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Apple
will expand its workforce at new and existing offices
across the country and plans to build a billion-dollar
campus for 5,000 additional employees in Austin, Texas.
Though
Austin will land the biggest part of the Silicon Valley
giant’s expansion, the Cupertino company also
announced plans Thursday to open additional offices in
Culver City, San Diego and Seattle — bringing
headcounts to 1,000 in each over the next three years.
It will add hundreds of employees in its offices in
Boulder, Colo., Pittsburgh and New York as well.
“Talent,
creativity and tomorrow’s breakthrough ideas aren’t
limited by region or zip code, and, with this new
expansion, we’re redoubling our commitment to
cultivating the high-tech sector and workforce
nationwide,” Apple Chief Executive Tim Cook said in a
statement.
Despite
Cook’s rhetoric, Apple — which employs 90,000
workers in roles ranging from retail to engineering
across the country — isn’t spreading its high-end
tech jobs too widely. Like other behemoths in its
industry, it’s picking cities that already fit a
certain tech-ready mold.
Thursday’s
announcement follows on the heels of similar moves from
other West Coast tech conglomerates. Google executives
have discussed plans to more than double the company’s
7,000-employee operation in New York City. Amazon, after
pitting cities against one another in a yearlong bidding
war for its new mega-offices, settled on splitting
50,000 workers between New York City and the D.C. metro
area, which already boast established tech economies.
The
places where Apple is looking to grow share a similar
profile, with vibrant cultural scenes and the types of
amenities favored by high-income tech workers.
“The
digital strong get stronger, in terms of tech
employment,” said Mark Muro, senior fellow and policy
director at the Brookings Institution’s Metropolitan
Policy Program. “Big tech companies are looking for
the same demographic, the same sorts of development
talent, and those are pooling and agglomerating in a
short list of big places — Austin is very much cut
from the same cloth.”
Nearly 45
percent of tech industry jobs are concentrated in 10
major metropolitan areas, according to research set to
be published by Muro’s office this month.
But the
success of technology companies in their historic home
— the San Francisco Bay Area — has in a way become a
burden. With 10 percent of the nation’s total tech
workforce competing for housing in the region, prices
have soared and traffic has intensified, making other
areas more attractive to some workers.
“You
have only to look at Seattle and the Bay Area as the
state-of-the-art dystopian over-concentrations,” Muro
said. “These industries have brought tremendous
prosperity, but they’ve also created a quality-of-life
disaster in many respects.”
In
January, Apple laid out plans to add 20,000 jobs and
invest more than $30 billion in the United States over
the next five years in response to the huge tax windfall
it would receive under the tax cuts signed into law in
late 2017.
The
company, which is the most profitable in the world, had
long been criticized for hoarding money overseas to
avoid taxes, but a provision in the 2017 cuts allowed
for a one-time repatriation of cash held abroad at a
lower rate. Previously, those earnings would have been
taxed at the standard 35 percent corporate tax rate.
Under the new law, the rate is just 15 percent.
Apple
took advantage of the discount to bring back much of its
overseas holdings, the company said in January, adding
that it would make a one-time tax payment of $38 billion
as a result.
Culver
City’s mayor told The Times that Apple is not
receiving any financial incentives in the city. In
Austin, Apple is set to receive as much as $25 million
in taxpayer-funded grants and is seeking a 15-year
property tax abatement from Williamson County, according
to reporting by the Austin American-Statesman.
Apple’s
plans to expand its footprint with a new Culver City
office are a sign of its growing investment in original
content production.
The
company is expected to spend $1 billion this year on
original content, increasing to $4.2 billion in 2022,
according to venture capital firm Loup Ventures.
The
company is putting money in TV shows and films at a time
when investors are concerned that its main business —
selling iPhones — is slowing. Apple has focused on
building up other businesses, including subscription
services such as Apple Music. The tech giant plans to
launch a streaming television service next year,
according to digital media company the Information.
In
January, Apple leased a four-story building near Culver
City’s art gallery district to house its pending
expansion. Apple did not immediately return requests for
comment on how many people are currently employed in
Culver City.
The
company established a significant footprint in the city
when it acquired Beats Electronics in 2014 for $3
billion in an effort to enter into the streaming music
space. At the time, Beats had roughly 700 employees in
Culver City, and Apple was expected to lay off roughly
200 workers in 2014. Since then, Apple has been hiring
to build up its efforts in video. One recent hire is
Tamara Hunter, Apple’s head of casting for worldwide
video, previously head of feature casting for Sony
Pictures Entertainment.
The
largest planned expansion is set for North Austin, where
the company will build a campus covering more than 130
acres less than a mile from its current office complex,
according to the announcement.
Though
initial plans call for 5,000 new positions, the facility
will have capacity for the company to hire up to 15,000
workers in the area, which would make Apple the largest
private employer in the Texas capital.
“Apple
is among the world’s most innovative companies and an
avid creator of jobs in Texas and across the country,”
Texas Gov. Greg Abbott said in a statement. “Their
decision to expand operations in our state is a
testament to the high-quality workforce and unmatched
economic environment that Texas offers.
Apple’s
Cupertino headquarters, nicknamed “the spaceship”
for its UFO-like design, has capacity for 13,000
employees, though the company employs an estimated
26,000 total across the city.
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