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Amazon is pausing construction on its second headquarters located near Washington D.C. as it makes an effort to cut costs, according to news reports.
The company is expected to complete the first phase of its new Arlington, Virginia, headquarters dubbed “HQ2” in June, but is pausing construction on the larger portion of the project located across the street, according to reports in Bloomberg and CNBC.
The decision to pause the project coincides with the e-commerce giant’s deepest ever job cuts. A series of layoffs begun in 2022 will see Amazon shed about 18,000 jobs, and it has frozen corporate hiring.
It also comes as Amazon, which grew rapidly during the pandemic, is reassessing aspects of its commercial real estate footprint, with corporate positions at the company appearing likely to be performed remotely — at least partially — for the next few years.
Amazon’s head of real estate John Schoettler confirmed the pause in a statement to media outlets but said the company remains committed to finishing the project. Amazon has pledged to invest over $2.5 billion to build its Arlington campus and create some 25,000 construction jobs in the process.
“We’re always evaluating space plans to make sure they fit our business needs and to create a great experience for employees,” he said. “And since Met[tropolitan] Park will have space to accommodate more than 14,000 employees, we’ve decided to shift the groundbreaking of PenPlace out a bit.”
The company has not specified when construction may resume on the project.
The delay affects construction on a large phase of the project that calls for three 22-story office towers and the Helix, a 350-foot tall corporate conference center and indoor garden.
Amazon originally announced plans for a second corporate headquarters that would house 50,000 employees in 2017, inspiring cities across the nation to bid enthusiastically on the project. The company initially planned to split the headquarters between New York and Virginia but pulled out of New York after opposition from local groups and politicians.
Virginia has committed to approximately $800 million in tax breaks and infrastructure improvements over 15 years in exchange for the 25,000 corporate employees the project will bring there.
Separate construction projects in Washington state, and Nashville, Tennessee were also paused recently as Amazon reconsidered their designs.
“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 nonprofits,” Schoettler said. “We appreciate the support of all our partners and neighbors, and look forward to continuing to work together in the years ahead.”
