Amazon has paused construction on its second headquarters in Arlington, Virginia, in the latest cost-cutting effort at the ecommerce and cloud giant.
Amazon has about 8,000 employees based at the site in Arlington, working in an already-completed phase 1 of the new campus called Met Park. Construction on a second phase, known as PenPlace, had been due to begin this year. That site comprises three office buildings and the “Helix”, a 350-foot corkscrew-shaped tower that was due to be the architectural centrepiece of the new office hub — its largest outside Amazon’s home city of Seattle.
The company said the pause was not related to job cuts announced earlier this year, in which it planned to dismiss 18,000 people from its corporate workforce, following years of rapid hiring.
“We’re always evaluating space plans to make sure they fit our business needs and to create a great experience for employees,” said John Schoettler, Amazon’s head of real estate, in a statement on Friday.
Amazon said it was still committed to the $2.5bn project, which it expects will bring 25,000 workers to the region just outside Washington, DC, by 2030.
The delay to its so-called HQ2, first reported by Bloomberg, is symbolic of how Amazon has looked to tap the brakes on years of heavy investment and expansion. It has also scrapped or delayed other office plans in the US, and told some of those due to start on graduate schemes they would need to wait.
Amazon’s decision to build a second big office campus outside Seattle sparked a bidding frenzy in 2018, as multiple cities clamoured to be considered as the location for the tens of thousands of high-paying jobs the ecommerce group had promised to create. Stonecrest, a city in Georgia, offered to change its name to “Amazon” if it was selected.
After drawing up a shortlist of 20 cities, Amazon’s initial decision to split its proposal between Arlington and a neighbourhood in the New York City borough of Queens drew heavy criticism and accusations the company had used the bidding process as a way of pushing for greater tax breaks and other incentives.
Amazon ended up abandoning its New York plans after local opposition led by Democratic congresswoman Alexandria Ocasio-Cortez, but said it would press ahead with plans in Arlington.
No date has been given for when construction will resume. However, the company has committed to a number of public-use projects that were due to be finished by early 2025.
“Since Met Park will have space to accommodate more than 14,000 employees, we’ve decided to shift the groundbreaking of PenPlace out a bit,” Schoettler added.
“Our second headquarters has always been a multiyear project, and we remain committed to Arlington, Virginia, and the greater Capital Region — which includes investing in affordable housing, funding computer science education in schools across the region, and supporting dozens of local non-profit[s].”
Don Beyer, the Democratic House member representing the Virginia district where the headquarters is being built, said he had been assured by Amazon that promised “community benefits” would still materialise.
“Monetary incentives were tied to economic benefits to the region and therefore have not and will not engage until established metrics are reached,” Beyer said in a statement.