ARLINGTON COUNTY, Va. — Amazon is pausing construction of its second headquarters in Virginia following the biggest round of layoffs in the company’s history and shifting landscape of remote work.
The Seattle-based company is delaying the beginning of construction of PenPlace, the second phase of its headquarters development in Northern Virginia, said John Schoettler, Amazon’s real estate chief, in a statement. He said the company has already hired more than 8,000 employees and will welcome them to the Met Park campus, the first phase of development, when it opens this June.
“We’re always evaluating space plans to make sure they fit our business needs and to create a great experience for employees, and since Met Park will have space to accommodate more than 14,000 employees, we’ve decided to shift the groundbreaking of PenPlace (the second phase of HQ2) out a bit,” Schoettler said.
He also emphasized the company remains “committed to Arlington” and the local region, which Amazon picked - along with New York City - to be the site of its new headquarters several years ago. More than 230 municipalities had initially competed to house the projects. New York won the competition by promising nearly $3 billion in tax breaks and grants, among other benefits, but opposition from local politicians, labor leaders and progressive activists led Amazon to scrap its plans there.
"It really doesn’t concern me," said Arlington County Board Chair Christian Dorsey during a media briefing Friday afternoon.
He told WUSA9 that he's "quite understanding" about the situation. "If you look at the world if you look at the world, there’s a lot of uncertainty about what is ahead and as we all negotiate the post pandemic reality, everyone from every sector is thinking about its long-term plans in a new light. Sadly we don’t all have all of the answers, so it’s not incredibly surprising that Amazon is taking a pause before beginning a second phase of a project for which they haven’t fully opened the first phase," said Dorsey.
In February 2021, Amazon said it would build an eye-catching, 350-foot Helix tower to anchor the second phase of its redevelopment plans in Arlington. The new office towers were expected to welcome more than 25,000 workers when complete. Amazon spokesperson Zach Goldsztejn said those plans haven't changed and the construction pause is not a result - or indicative of - the company's latest job cuts, which affected 18,000 corporate employees.
The job cuts were part of a broader cost-cutting move to trim down its growing workforce amid more sluggish sales and fears of a potential recession. Meta, Salesforce and other tech companies — many of which had gone on hiring binges in the past few years — have also been trimming their workforce.
Amid the job cuts, Amazon has urged its employees to come back to the office. Last month, Amazon CEO Andy Jassy said the company would require corporate employees to return to the office at least three days a week, a shift from from the prior policy that allowed leaders to make the call on how their teams worked. The change, which will be effectively on May 1, has ignited some pushback from employees who say they prefer to work remotely.
Goldsztejn said the company is expecting to move forward with what he called pre-construction work on the construction in Virginia later this year, including applying for permits. He said final timing for the second phase of the project is still being determined. The company had previously said it planned to complete the project by 2025.
Chair Dorsey told WUSA9 until that relatively recent announcement, they didn't even think the project would be complete within this decade.
"We were looking at 2035 as ultimate buildout of HQ2. It's only because they proceeded building so aggressively and entitling the second project so early that I think it shifted all of us to believing this was going to come a lot earlier," said Dorsey.
Arlington leaders sent out a statement saying they value the partnership with Amazon. The full statement is below:
Arlington County values the ongoing partnership with Amazon throughout the creation of its second headquarters – HQ2 has always been a multi-year project, and it continues to be a long-term commitment to Arlington and Virginia. We’re confident Amazon remains committed to the second phase of the project – PenPlace – and its benefits to the community, including affordable housing and the exciting partnership with Arlington Public Schools for the Community High School. We remain committed to working with Amazon in the years ahead, and look forward to the opening of phase one – Met Park – later this year.