Raleigh tech company walks away from $32M jobs incentive due to North Carolina hiring requirement

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Friday, January 26, 2024
Raleigh tech company walks away from $32M jobs incentive
Tech company Bandwidth made a major footprint in the Triangle tech world, but now it's turning down state money and citing a changing hiring ecosystem

RALEIGH, N.C. (WTVD) -- The Raleigh tech company Bandwidth made a major footprint in the Triangle tech world, building a large compound for their global headquarters near PNC Arena off Edwards Mill Road.

The company has employed 750 people, including 87 recent local hires, and their headquarters is home to a large center with basketball and tennis courts, a Montessori school and walking trails.

Despite that, though, the company announced it would be backing out of a $32 million incentive package with North Carolina Department of Commerce that would have required the company make 1,100 additional local hires. Bandwidth pulled out of the agreement before any state money was spent.

The reasoning, according to the company's letter to the state was "As we evaluate our business objectives, we believe that the Company's withdrawal from the Grant will give us greater flexibility to drive thoughtful workplace planning along with our North Carolina growth strategy."

A spokesperson for the company tells ABC11 that after a major global expansion, the company wanted more flexibility to accommodate remote workers.

It's also something that NC State Professor Emeritus Dr. Michael Walden said is becoming the new normal in the post-COVID work environment.

"Incentive packages are going to have to reflect the new realities of businesses, particularly in the tech sector where remote works is going to be a bigger deal," Walden said.

Walden said while it is true that workers outside the state aren't spending their salaries in North Carolina, having the companies themselves here is still a boom to the economy, and the state could also lower the amount of money spent on incentives if it's not entirely tied to the number of jobs.

"I think this is not -- this is certainly in no way negative or devastating or critically bad for North Carolina. It's just a recognition that how companies now do business is changing," he said.

Walden said another way the state can promote local jobs is focusing on areas with lower cost of living, for example, Goldsboro or Kinston and providing incentives for remote workers for companies in the Triangle, so the economic impact remains in state.

Meanwhile, Bandwidth said despite its decision, it is still focused on hiring local jobs in the Triangle.