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Amazon suspends construction of 2nd headquarters in Virginia


NEW YORK (AP) — Amazon is halting construction on its second headquarters in Virginia after the largest round of layoffs in the company’s history and the changing landscape of remote work.

The Seattle-based company is delaying the start of construction on PenPlace, the second phase of development of its Northern Virginia headquarters, John Schoettler, Amazon’s real estate chief, said in a statement. He said the company has already hired more than 8,000 employees and will welcome them to the Met Park campus, its first phase of development, when it opens in June.

“We are always evaluating space plans to make sure they fit our business needs and create a great employee experience, and since Met Park will have space to accommodate more than 14,000 employees, we decided to expand the groundbreaking PenPlace (the second phase of HQ2) a little bit,” Schoettler said.

He also emphasized that the company remains “committed to Arlington” and the local region, which Amazon — along with New York City — selected several years ago as the location for its new headquarters. More than 230 municipalities had initially competed to accommodate the projects. New York won the contest by promising nearly $3 billion in tax breaks and subsidies, among other things, but opposition from local politicians, labor leaders and progressive activists led Amazon to scrap its plans there.

In February 2021, Amazon said it would build a striking, 100-foot Helix Tower to anchor the second phase of its redevelopment plans in Arlington. The new office towers are expected to welcome more than 25,000 employees when completed. Amazon spokesperson Zach Goldsztejn said those plans have not changed and the construction pause is not a result of — or indicative of — the company’s latest job cuts, which affected 18,000 of the company’s employees.

The job cuts were part of a broader cost-cutting drive to reduce growing workforce amid slower sales and fears of a possible recession. Meta, Salesforce and other tech companies — many of which had massively hired people in recent years — have also cut back their workforces.

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 company employees to return to the office at least three days a week, a shift from previous policies that allowed leaders to call in on how their teams worked. The change, which goes into effect on May 1, has seen some resistance from employees who say they prefer working remotely.

Goldsztejn said the company expects to move forward with what he called pre-construction work on the Virginia structure later this year, including applying for permits. He said the final timing for the second phase of the project is still being determined. The company had previously said it planned to complete the project in 2025.

Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.