Amazon delays HQ2 phase two

Published March 30, 2023 by Katherine Schulte

Amazon.com Inc. is delaying construction on the second phase of HQ2, its $2.5 billion East Coast headquarters in Arlington County.

The news comes as Amazon plans to open HQ2’s first phase, Metropolitan Park,
in June, and as the Fortune Global 500 tech company laid off a record 18,000 workers amid concerns over slowing revenues and a potential recession.

Amazon anticipated the groundbreaking for its second phase, PenPlace, to occur this year. While the e-tailer has not offered an updated timeline for construction on phase two, Amazon has begun some pre-construction work, including applying for permits, and expects to continue such efforts this year.

“We’ve already hired more than 8,000 employees in HQ2 and we’re excited to welcome them to our new Met Park campus this June,” Amazon Vice President of Global Real Estate and Facilities John Schoettler said in a statement March 3. “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 out a bit.”

Amazon originally announced that HQ2 would create 25,000 jobs by 2030, and the company says its hiring goals have not changed.

Amazon rapidly grew its global workforce during the pandemic, ending 2021 with more than 1.6 million employees, up from 798,000 in the fourth quarter of 2019, according to CNBC. The company began layoffs in November 2022 and paused corporate hiring. Citing the need to reevaluate designs for hybrid work environments, Amazon also paused construction in July 2022 on six office buildings in Bellevue, Washington, and Nashville, Tennessee, according to Reuters.

The company has not yet decided whether it will modify its PenPlace plans, which include 3.3 million square feet of office and retail space spread across three, 22-story buildings, as well as the distinctive spiral Helix building.

Arlington County Board Chair Christian Dorsey says the delay is not a cause for concern.

“As we all negotiate the post-pandemic reality, everyone from every sector is thinking about … long-term plans in a new light, and sadly, we don’t all have all of the answers,” he says, “so it’s not incredibly surprising that Amazon is taking a pause before beginning the second phase of a project for which they haven’t fully opened the first phase.”  

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