Amazon is pausing construction on its second headquarters in Virginia

By Catherine Thorbecke, CNN

Amazon is pausing construction on its second headquarters in northern Virginia, the company confirmed in a statement to CNN on Friday.

John Schoettler, Amazon’s real estate chief, said the company is pushing back the groundbreaking of the second phase of the sprawling new headquarters. The first phase is still under construction and expected to open in June.

“We’ve decided to shift the groundbreaking of PenPlace (the second phase of HQ2) out a bit,” Schoettler said in a statement. “Our second headquarters has always been a multi-year project, and we remain committed to Arlington, Virginia, and the greater Capital Region.”

Schoettler added that Amazon has already hired more than 8,000 employees at the headquarters and the company is excited to welcome them to the first phase of the new campus, dubbed Met Park, this June.

Amazon’s search for a second headquarters kicked off in 2017, spurring a major competition as local officials across the country competed for the e-commerce giant to bring jobs and other benefits to their communities. Some 238 communities submitted bids in 2017 to be the home of Amazon’s second headquarters, with some offering major tax breaks or even to rename land “city of Amazon.“

Amazon ultimately picked New York and Virginia for its new headquarters after a year-long search, but later scrapped its plans for New York after facing backlash from members of the community.

The company’s decision to pause construction comes just two months after Amazon CEO Andy Jassy confirmed the company would be eliminating more than 18,000 jobs amid a broader cost-cutting effort after Amazon hired rapidly in the early years of the pandemic.

Zach Goldsztejn, an Amazon spokesperson, told CNN that the pause is not a result or indicative of role eliminations at the company. Goldsztejn said Amazon’s long-term intention and commitment regarding HQ2 remains unchanged, including the company’s plans to bring 25,000 corporate and tech jobs to the new headquarters.

News of the construction pause was first reported by Bloomberg earlier Friday.

Amazon’s move comes as a growing number of tech companies rethink their real estate footprint and investments, amid a downturn in the tech industry driven by a shift in pandemic demand and broader economic uncertainty. Facebook-parent Meta, Microsoft, Salesforce and Snap have each shuttered offices or announced plans to cut back on real estate in recent months.

The effect of those pullbacks can already be felt across the country, from Atlanta, where Microsoft paused development of a new campus, to San Francisco, where some local businesses say they are facing the ripple effects of remote work and multiple tech office closures.

Some community members have said the tech pullback feels like “broken promises” and raised concerns about the potential fallout from these moves in their neighborhoods.

In his statement, Schoettler said Amazon remains committed to Arlington, including “investing in affordable housing, funding computer science education in schools across the region, and supporting dozens of local nonprofits.”

“We appreciate the support of all our partners and neighbors, and look forward to continuing to work together in the years ahead,” he said.

The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.