Will TikTok leave San Jose if ban takes hold?
(BCN) — The U.S. TikTok ban is raising questions about the app’s future in San Jose, where its Chinese parent company, Bytedance, is expanding its office space.
President Joe Biden signed the ban into law on Wednesday, claiming national security risks, which would prohibit the downloading of TikTok from app stores if Bytedance doesn’t sell the app within nine months. Since 2022, the company has subleased more than 658,000 square feet of office space from Yahoo on Coleman Avenue in North San Jose, near San Jose Mineta International Airport, and expanded its footprint in March into the Roku building next door.
“We have thousands of employees as well as 16 million users in California. We’re not going anywhere,” a company spokesperson told San Jose Spotlight.
Economic development experts don’t see the company leaving Silicon Valley as a result — at least not any time soon.
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“There’s a reason they initially came to Silicon Valley, and it’s all of the other big companies here. There’s a secret sauce to the innovation that happens here — to the engineers, to the energy, to the spirit of everything,” Bob Staedler, a land-use consultant, told San Jose Spotlight. “I think they’re not going to want to leave here because they’re doing things well. They’re profitable. They’re successful.”
Staedler is hesitant to make the same national security judgment that U.S. lawmakers have made about the company.
“I don’t want to presuppose that they are what they’re alleged to be, but I think it’s in their best interest and I think everyone’s global interest is for them to come to a resolution on how to make the U.S. government comfortable with their management structure,” Staedler said.
One of Silicon Valley’s most powerful congressional delegates has been vocally critical of the ban, which comes as TikTok’s 170 million monthly U.S. users depend on the app for more than just socialization.
“I voted no on the bill to ban TikTok because it hurts the free speech of creators, activists, organizers and small business owners who rely on the app to have their voices heard and many whose livelihoods depend on the app,” Congressman Ro Khanna told San Jose Spotlight.
Russell Hancock, CEO of economic think tank Joint Venture Silicon Valley, agreed having a presence in the valley is a no-brainer. But he wonders about the potential effects on the local tech workforce if ByteDance were to leave.
“They’re right here in San Jose and this might affect the employment numbers, so there’s that. However, this is not unique to TikTok. The entire valley is going through a period of retrenchment, downsizing, finding new efficiencies and every tech titan has done this,” Hancock told San Jose Spotlight.
In February, San Jose Spotlight reported that nearly 16,800 local tech employees have been laid off since July 2021, on the heels of unprecedented hiring during the pandemic.
“TikTok is joining the club in that sense if this translates into layoffs or reductions or even a departure from Silicon Valley,” Hancock said. “What’s interesting is that even in the light of all this downsizing, our unemployment rate has remained low.”
Staedler sees TikTok’s presence as a boost for the valley.
“The value in having a major company like TikTok is extremely important. It’s part of the infrastructure. It’s part of the tax base as far as office buildings and everything,” Staedler said. “I don’t think they’re going to go. If it was in their best interest to be elsewhere they would have done that years ago.”
Hancock said it won’t make a difference if the company departs.
“There’s opportunity in this for TikTok’s competitors — Instagram , Facebook, Whatsapp — those other platforms out there which also have major Silicon Valley presences,” Hancock said. “The shuffle might just be a shuffle between platforms.”
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