Green Dot Corp., whose newly minted top executive has been injecting new life into the lackluster corporation, has confirmed that the company is moving its headquarters to Austin, Texas, from Pasadena, where it has been located since the late 1990s.
“We’re excited to announce our plan to move Green Dot’s corporate headquarters from Pasadena, Calif., to Austin, Texas,” the company said in a statement confirming comments made initially by CEO Dan Henry to CNBC on May 7.
“Texas is a business-friendly state, and we’re looking forward to engaging and benefiting from the impressive talent pool in the region, as we work to seamlessly connect more people to their money, both directly through our own fintech, and through our partners,” the company said.
“This move supports our “Work From Anywhere” strategy to hire great talent all over the country while offering the benefits and flexibility of remote work, along with hub locations in Pasadena, Cincinnati, Tampa and Austin where teams can gather, connect and collaborate effectively,” the company added.
Green Dot becomes the latest in a string of major corporations to bolt from California to the Austin area, which features lower state taxes, more affordable housing and other amenities.
Over the past year, companies such Hewlett Packard Enterprise Co., Oracle Corp. and Palantir Technologies have left Silicon Valley, citing high taxes and housing costs as primary reasons for their moves.
Joe Lonsdale, who co-founded data mining software giant Palantir Technologies with investor Peter Thiel, last year announced plans to move to Austin along with his venture firm 8VC.
The Los Angeles area has seen its share of departures in recent years, including Jacobs Engineering Group Inc., which moved to Dallas; Parsons Corp., which left for Centreville, Va.; Northrop Grumman Corp., which moved to Falls Church, Va.; and Hilton Worldwide Holdings Inc., which shifted to McLean, Va.
“It’s simple math and logic. I am surprised even more companies don’t do the same. (Texas offers) a combination of business friendly, growth-oriented policies with attractive housing and tax options for the employees,” said George Sutton, research partner with Craig-Hallum Capital Group in Minneapolis.
“The Austin region continues to be a top global destination for companies looking to grow,” Laura Huffman, president and Chief Executive of the Austin Chamber of Commerce, said in a statement to the Business Journal.
“Companies choose the Austin region because it is where they think they will be most successful, and it is where they will find high quality of talent that enjoys a high quality of life,” she added.
Green Dot's main line of business is a federally insured prepaid debit card that can be used to make payments and purchases and withdraw cash. Green Dot cards are sold at retailers such as CVS, Rite-Aid and Wal-Mart.
Henry was named chief executive officer of Green Dot in March 2020. He has been running the business without a permanent chief financial officer, the No. 2 spot in the company.
Henry did not give details on when the move would occur, what would happen to Green Dot's Pasadena headquarters building following the move, and whether layoffs might be involved, or hirings elsewhere in the company's geographic footprint across the United States.
Henry has vowed to make the prepaid card issuer less reliant on promotional marketing of its traditional products and more dependent on its banking license to drive profits.
On May 5, Green Dot reported that profit fell 82.1% in the 2021 first quarter while revenue rose 9%. Profit dropped to $25.7 million on revenue of $393.5 million in the quarter, compared to profit of $46.8 million on revenue of $362.2 million in the same year-ago period.
But thanks to stimulus dollars and unemployed benefits enacted by the federal government in March, Green Dot raised its financial forecast for 2021.