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Protocol Index: Tech workers are leaving Silicon Valley

San Francisco

Good morning! This Tuesday, data shows that tech workers are leaving Silicon Valley, Vroom prepares for its IPO, and a company you've never heard of is worth more than Ford. Want Index in your inbox each morning? Subscribe here.

What Matters Today

  • 2 p.m. PDT: Chewy executives will discuss the pet ecommerce company's earnings. Its shares are up 68% so far this year, with investors hoping that shoppers buying online for the first time will stick with the brand going forward.
  • Also: Vroom is set to list, after the used-car sale site raised a better-than-expected $468 million in its IPO yesterday.

Today's News

As of 4:55 a.m. PDT: Nasdaq Futures: -0.40% | Euro 600: -1.07% | Nikkei: -0.38% | Hang Seng: 1.13%



  • Amazon sued Brian Hall, a former AWS VP, alleging that he violated a non-compete agreement by taking a new job at Google Cloud.
  • IBM said it will no longer produce general-purpose facial recognition technology, telling members of Congress that it thinks the tech should not be used for mass surveillance.
  • WeWork is considering shutting down its communal living project, according to Bloomberg.
  • Careem, Uber's Middle Eastern subsidiary, said business is still down as much as 60% from a year ago.
  • Dr. Peng Telecom and Media Group, a Chinese telecoms service provider, is reportedly in trouble after Moody's downgraded its credit rating.
  • Only 53 of the 533 startups applying to the U.K.'s startup investment fund have been approved.


  • Lemonade, a SoftBank-backed insurance startup, filed for its IPO. It lost $109 million last year.
  • Lilium, which is trying to make electric flying taxis, raised $35 million from Baillie Gifford at a reported valuation of over $1 billion.


Tech workers are leaving Silicon Valley

There's been a lot of speculation as to what the future of work means for where people actually live: whether people will escape the sky-high prices of Silicon Valley in favor of gigantic yards in Utah instead. New data suggests that is actually happening — to an extent, at least.

  • Last month, San Francisco rental prices dropped 9% year-on-year, according to online rental platform Zumper. That's compared to a 0.2% decrease across the whole country.
  • "We're hearing stories of apartment buildings in San Francisco being a third empty," Zumper CEO Anthemos Georgiades recently told me. People have been quarantining out-of-state (often at their parents' houses), and "they've come back, moved their stuff out, and left for good."
  • "Shelter in place or unemployment … isn't a good enough reason to explain all of this," Georgiades said, saying that he thinks remote work plays a part.

The biggest drops have been in Mountain View and Menlo Park, right by some of the biggest tech campuses, where rents are down 14% to 15% — signaling that some of those employees don't expect to ever return to the office.

  • "The Bay Area is compounding, obviously, job losses and recessionary trends with the fact that the future of work, for a significant minority, is going to look very different," Georgiades said.

But California won't become a ghost town just yet. Though Georgiades said some people are leaving the state — Salt Lake City, Scottsdale, Denver and Austin are popular destinations — most are moving within it, to cheaper areas like Oakland (which saw rents rise 4.9% year-on-year).

  • Zumper data shows that the top outbound location for SF renters was the San Francisco-Oakland-San Jose metro, with Sacramento-Stockton-Modesto coming in second.
  • LA is third, followed by Sonoma County and Seattle-Tacoma.

As for the impact on rental prices? Georgiades thinks you should expect a decrease, but nothing too dramatic.

  • "This is not going to halve San Francisco rent prices," he said, saying that even a 25% decline seems unlikely. But there will probably be some effect: Back in 2014, Zumper research found that around a third of SF rent prices could be attributed to venture capital.


  • "Our request is that the state and federal governments together make up for the cost gap between the U.S. and Taiwan." — TSMC Chairman Mark Liu said the company was still in discussions with U.S. authorities over subsidies for its new Arizona plant.
  • "We've had a lot of dialogue around things like payment extensions that I've tried to turn from tactical conversations into relationship-building conversations." — Pinterest CFO Todd Morgenfeld said advertisers have requested payment extensions.
  • "COVID-19 has illustrated the importance of digitalization, and the need to accelerate it within and beyond the public sector." — Singapore GovTech's Kok Ping Soon explained why the country has increased its tech budget.

Closing Bell

Nikola is coming for Tesla

Last week, electric and hydrogen-fuel-cell truck startup Nikola went public. The company, which expects zero revenue this year, has seen Tesla-like levels of enthusiasm for its stock: Ahead of markets opening this morning, the company was worth over $30 billion. As Bloomberg notes, that's more than Ford, which sold 2.4 million vehicles last year. Not that markets are malfunctioning or anything.

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