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Mayor of San Francisco admits her city needs to adjust to new reality that many workers will not return to working in an office

The mayor of San Francisco has denied there has been an exodus from her city, but admits a large change is impacting local businesses.

Speaking to CNBCs The News with Shepard Smith last Friday, San Francisco Mayor London Breed said her city will have to adjust to the new reality that many workers arent coming back to the office.

Remote and home working became the norm for millions of workers around the world during the Covid-19 pandemic. And many workers are opting not to return to the office, but instead continue working from home, or adopt a hybrid working pattern.

The San Francisco Bay area is home to many big name tech firms, and the city itself took a $400 million hit to its tax revenues in 2021, as businesses moved to other cities and shifted to remote working, CNBC reported.

Mayor London Breed acknowledged that tech workers have been slower to return to physical spaces in San Francisco than in other major cities.

I wouldnt call this an exodus. I would call it a change, Breed said. Weve experienced a global pandemic. People have been working from home. And I think that most employees want some level of work from home as they returned to the office. And a lot of employers are providing that as an option.

According to CNBC, the office vacancy rate in San Francisco rose to 24.2 percent in the second quarter from 23.8 percent in the prior period, according to CBRE research.

Mayor Breeds office estimates that one-third of San Franciscos workforce is now remote and outside of the city.

Last year, that resulted in a $400 million hit to tax revenue, according to San Franciscos Office of the Controller.

Of course Im worried about the trend, but again, you know, this was a global pandemic where life has changed, Breed said.

San Francisco and indeed the US state of California, is also having to contend with big name tech firms relocating to other US states.

Elon Musk has repeatedly warned about Californias overtaxation and overegulation and overlitigation as reasons for companies relocating away to other states such as Texas or Florida.

In December 2020, Musk announced he had personally left California after he had sold his Bel Air homes.

Musk personally relocated to Texas, after living in Los Angeles for 20 years.

Then in October 2021 he followed through on his warning, after clashing repeatedly with Californian officials last year, and also moved Teslas corporate headquarters to Texas.

Other tech giants such as Oracle moved its corporate headquarters from California, and relocate it to Texas.

Hewlett-Packard Enterprise (HPE), one of the founding fathers of Californias tech homeland of Silicon Valley, also revealed it was leaving the golden state and moving its headquarters to Texas.

A number of other firms have already left the San Francisco Bay Area, including data-mining provider Palantir Technologies, which moved to Denver from Palo Alto.

E-cigarette maker Juul Labs also relocated to Washington from San Francisco, and Charles Schwab said its headquarters will move from San Francisco to Westlake, Texas.

Texas is already home for other tech firms such as Advanced Micro Devices (AMD), and Dell, among others.

Salesforce, one of San Franciscos largest private employer, said this week it is cutting its San Francisco office space for the third time during the pandemic, and is now listing 40 percent of a 43-story building thats across the street from the main Salesforce Tower.

But, not every major tech firm is cutting back.

Firms such as Autodesk, Google and Twilio have expanded their office space in San Francisco in recent years.

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San Francisco Mayor Admits City Has To Adjust To Remote Working Reality - Silicon UK