Chevron Corp. is planning to move its headquarters from California to Texas, making the longtime Bay Area firm the latest company to do so.

The country’s second-largest publicly traded energy company sold its longtime San Ramon, California, headquarters in 2022 to move into leased space as part of its plans to shrink its California workforce and expand in Houston.

The energy giant has 7,000 employees in Houston and 2,000 workers in San Ramon, Chevron said in a statement. Chevron will transition all "corporate functions" to Houston over the next five years to enable better collaboration and engagement with executives, employees and business partners.

Mike Wirth, Chevron's chairman and CEO, and Mark Nelson, the company's vice chairman, will move to Houston before the end of 2024. Positions that support Chevron’s California operations will remain in San Ramon, according to the statement.

Chevron owns two towers in downtown Houston that were formerly the headquarters of the now-defunct energy provider Enron. The 50-story, 1.25 million-square-foot tower at 1400 Smith St. in Houston is connected by a circular pedestrian glass walkway to the 40-story, 1.2 million-square-foot tower at 1500 Louisiana St.

Chevron's venture technology arm operates out of The Ion, a startup and tech incubator in midtown Houston. And Chevron bought more than 77 acres last year in a master-planned development about 33 miles northwest of downtown Houston for a proposed research and development campus.

Once Chevron makes the headquarters move to Houston official, it will become the 22nd Fortune 500 company to be based in the Bayou City, joining several other energy companies that call Houston home and help support the city's moniker: "energy capital of the world."

"Chevron’s recent decision follows other recent notable moves from California, including Hewlett Packard Enterprise's move to North Houston, as Houston’s relatively low cost of living and office rents have not been lost on many decision-makers," said Itziar Aguirre, CoStar's director of market analytics for Houston.

The California Bay Area has been one of the country's hardest hit areas by the COVID-19 pandemic. San Francisco, San Jose and the East Bay all have vacancy rates approaching 30% after being in the single digits in 2019, according to CoStar data.

"Businesses have been moving out of the Bay Area, and California as a whole, for several years," said Nigel Hughes, senior director of market analytics at CoStar Group. "Most cite the high costs of doing business, including staff costs, high taxes and more regulatory oversight."

Other companies leaving the region include Glassdoor, Oracle and Pinterest, all of which have embraced hybrid and remote work models. While these long-established companies are downsizing, newer businesses are looking to fill the gap.

Artificial intelligence companies have been responsible for many of the region's largest leases over the past year. In the largest example, ChatGPT maker OpenAI subleased over 400,000 square feet from Uber in the Mission Rock District in October.

Some companies are leaving over the state's public policies, such as X, formerly Twitter, the social media site owned by billionaire Elon Musk, that announced plans to relocate to Texas last month because of Musk's opposition to a new California law banning school districts from requiring schools to notify parents if their child asks to change their gender identification.

“I did make it clear to Governor Newsom about a year ago that laws of this nature would force families and companies to leave California to protect their children,” Musk wrote on the social media platform formerly known as Twitter.

The state of California sued Chevron and other large energy companies last year, alleging they misled the public about the risks of fossil fuels and how they contribute to climate change, according to reports.

Chevron CEO Wirth criticized the lawsuit last year and said that the dangers of climate change require a coordinated global policy response rather than litigation he claims benefits attorneys and politicians.

Chevron’s ties to California date back to the 1870s when petroleum pioneers Demetrius Scofield and Frederick Taylor discovered the first oil well in the state during the Gold Rush.

Chevron's operations in California today include oil fields, technical facilities, and two refineries, including one in Richmond, California, that supplies more than 1,800 retail stations in the state, according to the statement.

Meanwhile, Sunset Development, the buyer of Chevron's former 1.3 million-square-foot headquarters in San Ramon, wants to transform the 92-acre site as part of its mixed-use development called Bishop Ranch. Sunset is planning to build 2,600 residences, 125,000 square feet of retail and a 2.5-acre park.