Instagram expects New York to house up to half its engineers — eventually

Key Points
  • Instagram recently opened its New York office, and plans to house up to 50 percent of its engineering staff there.
  • New York allows a change of scenery for people in the Bay Area who want to relocate and could help Instagram to recruit from other talent pools, like people in finance.
Inside Instagram's Insta worthy new NYC headquarters

Instagram is making its presence known in the Big Apple with its first New York office, where the company plans to eventually house up to 50 percent of its engineering staff.

"We were just finding from a recruiting perspective it's going to be really great to just be able to expand," said Instagram co-founder and Chief Technology Officer Mike Krieger, in a recent interview at the company's New York open house. "It's really competitive in the Bay Area. It's competitive here as well, but I think we're newer here."

While San Francisco and neighboring Silicon Valley are clearly the hub for techies, the combination of the high cost of living and the mad competition for talent is making it difficult for some companies to grow without breaking the bank. In addition to high salaries and stock options, Bay Area companies are known for offering loads of other costly perks.

Instagram, which is owned by Facebook, isn't leaving the Bay Area. it's just going bicoastal.

The company estimates it will have 350 employees by the end of 2018 in its New York office, including one-third of its engineering staff. The teams in charge of its Stories, Feed and Feed ranking, Shopping, Search and Explore functions will run out of New York. Eventually, the city will likely be home to between 40 percent and 50 percent of its engineers, Krieger said.

"We're investing heavily in New York, and it's grown pretty large every single year," he said.

Kevin Systrom, co‑founder of Instagram
Emmanuel Dunand | Getty Images

A New York presence also allows Instagram to recruit from different talent pools, including people who are in finance who want to make the move to tech, Krieger said.

Then there are the West Coast engineers who are looking to move east.

"Some of them just get tired of the Bay Area, and they just want to move to New York," Krieger said. "We see a fair amount of Bay Area expats who come out here who are excited about a different lifestyle."

Expanding to New York also allows Instagram to grow other areas of its business, including advertising and shopping. It also has a built-in studio for future live video productions and gets the company in closer proximity to other big brands.

"For sure being in New York means we can develop much more close relationships with them, especially with shopping," Krieger said.