Apple to build $1B Austin campus, add thousands of jobs in US expansion

Apple already employs 6,200 people in Austin, Texas, but its new campus will initially add 5,000.

Apple

Apple will build a new Austin campus for $1 billion and expand its operations across the US, the company said Thursday.

The iPhone maker will also set up new offices in Seattle, San Diego and Culver City, California, as well as expanding operations in Pittsburgh, New York and Boulder, Colorado, according to its release.

The move fulfills Apple’s vow from January to set up a second large campus somewhere in the US. At the time, the company said would pay $38 billion in taxes to bring its overseas cash back to the US as part of a repatriation program. The company said it planned to invest $30 billion in the US over the next five years by building a new campus and creating 20,000 new jobs. Factoring in current spending, product sales tax and taxes on employees’ wages, Apple said it expects to contribute $350 billion to the US economy over that period. 

“Apple is proud to bring new investment, jobs and opportunity to cities across the United States and to significantly deepen our quarter-century partnership with the city and people of Austin,” Apple CEO Tim Cook said in the release about the expansion.

The Austin campus will be located less than a mile away from Apple’s existing facilities in the Texas city, which already employ 6,200 people (its largest group of employees outside its Cupertino, Calif., headquarters). The new area will initially hold 5,000 employees, with capacity to grow to 15,000 over time.

The Austin facility will take up about 3 million square feet of development on 133 acres. About 50 acres will be preserved open space, and the new campus’ work spaces will be entirely powered by renewable energy (as at all Apple facilities). 

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Apple offered a forecast on its US growth plans.

Apple

Apple, which generates the bulk of its revenue from iPhone sales, in August became the first US public company to be worth $1 trillion — though its recent stock drop has made it fall below that level. Over the past decade, Apple has been steadily growing its operations and investing in new businesses, like developing its own original content. It also has been overhauling its Apple Stores and even its offices. Its new Apple Park campus opened to employees in April 2017, six years after company co-founder Steve Jobs pitched the project.

The new Austin facility will be located on undeveloped property, which means utilities infrastructure need to be installed before building can begin. Apple plans to submit a site preparation permit to the city and start development work next year. Its first buildings will open in about 30 to 36 months. 

Widespread expansion

The choice of locations for the other new offices — each of which will employ over 1,000 people — hints at various aspects of Apple’s business and its opportunities to woo tech talent. Seattle is where Microsoft and Amazon are headquartered, San Diego is where chipmaker Qualcomm is based, and Culver City could be linked to its plans for original programming

It’ll also add hundreds of new jobs in Pittsburgh, New York, Boulder, Boston and Portland, Oregon, after having brought on 6,000 new American workers in 2018. The company noted that it’s on track to create 20,000 US jobs by 2023, as promised in January.

The announcement comes at a tough time for Apple. The company’s stock has lost about a quarter of its value since October. The decline has meant Apple’s no longer worth more than a trillion dollars. Thursday, Apple’s shares rose 1 percent to $170.77.

Market watchers have been worried about Apple since it reported fiscal fourth-quarter earnings Nov. 1. Its quarterly results showed it may be grappling with a case of iPhone fatigue — though it’s still getting people to shell out more money for the phones they do buy. Apple also said it would no longer detail unit sales of its major devices, a reversal from its strategy since first introducing the products. The quarterly results and plans to no longer break out iPhone sales have made investors skittish.

Apple currently employs 90,000 people in all 50 states, but it has come under political pressure from President Donald Trump, who wants the company to move production of its devices to the US from China. Apple does the majority of its research and development in the US, but the bulk of its devices have been assembled overseas. Apple also potentially faces tariffs on its products as part of Trump’s trade war with China, which would mean higher iPhone, iPad and other device prices. 

The Austin expansion announcement comes a month after Amazon picked New York’s Queens borough and Arlington, Virginia, as the two locations for its HQ2 project, promising to bring 25,000 well-paying jobs to each of those locations.

Originally published at 3:30 a.m. PT
Update at 10:10 a.m. PT: Adds additional details and background.

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