What Does Tesla's HQ Move to Austin Mean for its Palo Alto Location?

26 OCT 2021
Photo credit: Leon Seibert on Unsplash

In the 2021 annual meeting of stockholders, Elon Musk announced that Tesla will move its headquarters from Palo Alto to Austin. Yet, even as Musk announced the headquarters move, Tesla expanded its Palo Alto office space by 325,000 sqft.

With the office space expansion in Palo Alto, Tesla doesn’t appear to have plans to move entirely out of California any time soon. But what does the headquarters move to Austin mean for Tesla’s Palo Alto location? Let’s take a look at the talent data to find out.

Talent in Tesla Palo Alto HQ vs Tesla Giga Texas

Although Tesla is moving its headquarters to Austin, Palo Alto is currently home to many more Tesla employees than Austin. According to our data, Tesla’s Palo Alto location has a 6x higher headcount than Tesla’s Gigafactory in Texas (“Giga Texas”).

However, Tesla’s Austin location is growing faster than its Palo Alto office. In the last 12 months, hiring at Giga Texas has increased by 214%. Core employees (whom we define as software & hardware engineers that are core/essential personnel to Tesla’s business) have also grown by 233% in the last 12 months. Core/engineering employees have grown slightly faster than other roles in the Austin location.

Even with the headquarters move, Tesla’s Palo Alto location has continued to grow. In the last 12 months, total hiring is up 29% in the last 12 months, and core/engineering employees have grown by 32%. Like Giga Texas, Tesla’s Palo Alto location has seen core/engineering employees grow slightly faster than other roles.

While Giga Texas has expanded hiring more than its Palo Alto location, hiring is still growing quickly in Palo Alto, indicating that Tesla will continue to grow its Palo Alto location even though it is no longer Tesla headquarters.

In terms of talent composition, Tesla’s Palo Alto location has a heavier focus on core/engineering talent. 51% of employees in Palo Alto are in core/engineering roles, while 36% are in non-core roles (which includes roles like operations, finance, HR, and IT). The remaining 13% of employees are in core (industry-specific) and non-core (sales & marketing) roles, as shown below.



Contrasting Palo Alto, 38% of Giga Texas’ employees are in core/engineering roles, 49% are in non-core roles, and the remaining 13% of employees are in core (industry-specific) and non-core (sales & marketing) roles. This suggests that Tesla is focusing more on hiring non-core roles at Giga Texas.


Talent quality for engineers in both Palo Alto and Austin is similar, with both locations having Excellent quality. However, Austin ranks slightly higher for software engineer talent quality, and Palo Alto ranks slightly higher for traditional engineer talent quality.

Palo Alto also has more employees with advanced degrees (masters, PhD, or higher). 29% of Palo Alto employees have advanced degrees compared to 20% of Austin employees.

Tesla’s Palo Alto and Austin locations also differ in terms of employee composition. In Tesla’s Palo Alto location, 24% of employees are software engineers and 28% of employees are traditional engineers (electrical/mechanical).

In comparison, only 7% of Tesla’s Austin employees are software engineers. 32% of Austin employees are traditional engineers. Interestingly, 7% of Austin employees are in recruiting roles. This large and significant investment in recruiting personnel suggests their hiring is likely to accelerate further in Austin.

Conclusion

The Talent data runs consistent with the media headlines. Despite moving its headquarters to Austin, Tesla has no plans of getting rid of its Palo Alto location. In fact, Musk mentioned scaling up production in California by 50%.

One reason for Tesla’s expansion in Palo Alto could be that Austin and Palo Alto focus on different types of employees.

Tesla’s Palo Alto location skews towards traditional engineers and software engineers, with a heavy focus on software engineers. In contrast, Tesla’s Giga Texas location leans towards traditional engineers and business operations. Palo Alto appears to continue to be an important location for Tesla’s software engineers.

The significant hiring growth in Giga Texas indicates that Tesla is looking to scale up its facility in Austin aggressively. This is further supported by the high ratio of recruiting staff to all employees.

While Tesla’s headquarters move to Austin will encourage employee growth there, Palo Alto will continue to see Tesla investment.

In summary, our data shows that there is no clear evidence that Austin will not be the new HQ. Hiring trends over the next 12-24 months should be watched closely as it will confirm which functional teams (“user groups”) will be built in scale in each location (i.e, software engineering in Palo Alto or traditional engineers in Austin).

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