Amazon is holding off on the second stage of it HQ2 megaproject in Northern Virginia, the company announced Friday., according to CBS News.
HQ2 is predicted to eventually bring 25,000 new Amazon employees to Arlington, Virginia, in an area near the Pentagon. The first phase of the project, dubbed Met Park, is scheduled to open this summer as planned. Amazon has hired 8,000 new employees for the facility, which will measure 2.1 million square feet in size, a company spokesperson said.
Now, the retail giant said it will delay starting construction on PenPlace, the second phase of its headquarters.
“We’re always evaluating space plans to make sure they fit our business needs and to create a great experience for employees, and since Met Park will have space to accommodate more than 14,000 employees, we’ve decided to shift the groundbreaking of PenPlace (the second phase of HQ2) out a bit,” John Schoettler, vice president for World Wide Real Estate and Facilities, said in a statement to CBS News.
The announcement comes after the Seattle-based company announced the biggest corporate layoffs in its history, slashing 18,000 jobs early this year. It has also cut money-losing projects, such as the Alexa voice assistant team. Amazon joins other tech companies that are scaling back on costs after having boomed during the pandemic, including Alphabet, Microsoft and Meta.
The company said the construction pause is unrelated to the layoffs, and that the plans to eventually host 25,000 workers at the location have not changed.
The company “remain[s] 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 nonprofits,” Schoettler said.
Amazon started the project in 2018 after inviting cities to a nationwide bidding war for the chance to host the company’s second campus. It chose Northern Virginia and New York City, but dropped its New York plans after local elected officials and labor leaders objected to the nearly $3 billion in taxpayer subsidies the company was slated to get under the deal.
Some seized on news of the North Virginia pause as a chance to say “I told you so.”
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