Amazon is halting construction of its second Virginia headquarters after the most important round of layoffs in the corporate’s history and a change in plans for distant work.
The Seattle-based company is delaying the beginning of construction on PenPlace, the second phase of development for its headquarters in northern Virginia, John Schoettler, Amazon’s head of real estate, said in a press release. He said the corporate has already hired greater than 8,000 employees and can welcome them to the Met Park campus, its first phase of development, when it opens in June.
“We’re all the time evaluating space plans to make sure they fit our business needs and supply an ideal worker experience, and as Met Park can have space to accommodate over 14,000 employees, now we have decided to relocate the groundbreaking PenPlace (HQ2 Phase 2) a bit finished,” said Schoettler.
Schoettler also stressed that the corporate stays “committed to Arlington” and the local region that Amazon selected – together with Recent York – for its recent headquarters, generally known as HQ2, several years ago. Over 230 municipalities initially applied for a spot for the projects. Recent York won the competition, promising nearly $3 billion in tax breaks and subsidies, amongst other things, but opposition from local politicians, union leaders and progressive activists led Amazon to desert the plans.
In February 2021, Amazon said it will construct the eye-catching, 350-foot Helix Tower to anchor the second phase of its redevelopment plans in Arlington. When accomplished, the brand new office towers were expected to accommodate greater than 25,000 employees. Amazon spokesman Zach Goldsztejn said those plans haven’t modified and the construction outage shouldn’t be the result of – or indicative of – the corporate’s recent layoffs, which affected 18,000 corporate employees.
The layoffs were part of a wider cost-cutting effort to scale back Amazon’s growing workforce weaker sales and fears of a possible recession. Meta, Salesforce and other tech corporations – many of which have hired employees in the past few years – are also doing the identical.
On account of the downsizing, Amazon has urged its employees to return to the office. Last month, Amazon CEO Andy Jassy said the corporate would require corporate employees to return to the office no less than three days per week, a change from a previous policy that allowed leaders to call in about their teams’ work . The change, which can come into effect on May 1, has sparked some opposition from employees who say they like to work remotely.
Goldsztejn said the corporate expects to start out so-called pre-construction work on the Virginia site later this 12 months, including filing permit applications. He said the deadline for the second phase of the project remains to be being determined.
When Virginia won the competition to land HQ2, it did so less with direct incentives and more with guarantees to take a position in the regional workforce, most notably the Virginia Tech graduate campus, which is currently under construction just a number of miles from Amazon’s construction of Crystal City campus.
Despite this, there have been significant direct incentives. The state promised $22,000 for every recent Amazon job, provided that the typical salary of an worker in these recent positions is $150,000 a 12 months. But those incentives – about $550 million for the projected 25,000 jobs – are because of be paid in 2024 on the earliest. Goldsztejn, an Amazon spokesperson, said the corporate “has not received any incentives so far for constructing HQ2 and the 8,000 jobs we have created in Arlington since 2018.”
Arlington County has also promised Amazon a discount in hotel tax revenue on the idea that hotel occupancy will increase significantly once Amazon builds its campus. This incentive, initially projected to be around $23 million, is determined by what number of square feet of office space Amazon occupies in the county.
The county said in a press release that it “values its ongoing partnership” with Amazon in developing the second headquarters, which it noted has all the time been a multi-year project.
“We’re confident that Amazon stays committed to the second phase of the PenPlace project and its advantages to the community,” it said.
Amazon previously said it plans to finish the project by 2025.
