Amazon pauses construction of its second headquarters after steep layoffs and a declining need for office space as remote work increases.
Key Details
- Amazon has plans to spend $2.5 billion and hire around 25,000 workers to fill its secondary headquarters in Arlington, Virginia, by 2030.
- The first phase of the HQ2 will be finished as scheduled, with plans to move workers to the facility by June, but the company has paused construction on its large phase of three 22-story office towers and the 350-foot-tall helix that was to be placed across the street.
- In January, the company had its largest number of layoffs letting go of around 18,000 employees, and now the company is re-evaluating if it truly needs as big of an office space as it initially thought.
Why it’s news
Amazon has paused its ambitious plans of a huge secondary headquarters in Arlington, Virginia, as the company continues laying off employees and transitioning to remote work.
Amazon is almost finished with the first phase of its HQ2 outside of Washington DC and plans to move more than 8,000 workers to the 2.1-million-square-foot office development called Metropolitan Park by June.
In 2022, Amazon froze hiring and began a round of layoffs and in January let go of around 18,000 more workers. With the loss of employees and transition to remote work, the company decided to hold off on finishing the second phase of HQ2 as it is unsure if it needs that amount of office space.
Amazon grew fast during the pandemic as online retail shopping soared but recently has been among others in the tech sector to face extreme layoffs. Between the layoffs and more employees wanting to shift to remote work, Amazon began re-evaluating the need for the large office space it has dubbed PenPlace.
“We’re always evaluating space plans to make sure they fit our business needs and to create a great experience for employees,” says Amazon’s real-estate chief John Schoettler. “And 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.”
It has not been said when Amazon will continue with construction, but Schoettler assures that the company remains committed to Arlington, Virginia, and the greater Capital Region and hope to move forward with more advancements in the future.