Regional tech hubs across the U.S. are losing talent as workers return to the coasts, with Austin being one of the hardest hit
Isabelle BousquetteMay 20, 2025 at 12:14 pm
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It is a shift from five years ago, when Texas seemed like a growing Sunbelt beacon for tech, luring companies like Tesla, Hewlett Packard Enterprise and Oracle from California, and inspiring a number of remote tech workers and startups to follow them. But many of those companies have since laid off workers and Oracle actually relocated from Texas to Nashville, Tenn.
“I think that promise was never realized,” said Asher Bantock, SignalFire’s head of research. “This idea that it would become a new startup hub didn’t materialize.”
Return-to-office requirements combined with the burgeoning artificial-intelligence industry centralizing in Silicon Valley drew workers back West, while Austin’s fluctuating living costs and outdated infrastructure left new transplants frustrated, Bantock said.
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Gabriel Farid Guerra said he was extremely underwhelmed after moving to Austin from New York in 2022. Working a completely remote job at the time, he said he signed a one-year lease in the city, chasing the idea that it was “the new, booming U.S. tech hub.”
Compared with New York and San Francisco, he said, tech events were harder to find, the quality of events was lower and opportunities for new roles were sparser. Public transit also left something to be desired, he said.
He broke his Austin lease after six months, and after bouncing to Boston and Washington, D.C., Guerra moved to San Francisco. He recalled that when he was living in D.C., he was asked in which regions his then-employer, startup Antithesis, should promote its software product.
“They gave me a list of cities and asked me about Austin, and I said, ‘No, not Austin. It’s kind of dead.,” he said.
Reza Khosravi, a startup founder, relocated in 2021 from San Francisco to split his time between Dallas and Austin. He found the move to be a big culture shift. Innovation and diversity are deeply ingrained in Silicon Valley culture, he said, adding, “I did not find that in Austin.”
AI brought him back to San Francisco, where the networking and learning opportunities are unmatched, he said. SignalFire’s numbers show that Big Tech employment in San Francisco grew 1.8% in 2024, while startup employment grew 0.8%.
Thom Singer, chief executive of the nonprofit organization Austin Technology Council, said Austin remains a compelling tech city and believes its best days lie ahead. The city is improving infrastructure and fluctuating costs of living are stabilizing, he said. While the scale of opportunities and the AI hub in San Francisco can’t be denied, Austin has a unique sell, and it isn’t trying to compete with the coasts, he said.
