Amazon Pauses Construction on Second HQ

As further evidence of office and tech malaise: Amazon confirmed on Friday that it has pumped the brakes on building the second phase of its second headquarters in northern Virginia, the Associated Press reported.

The news that Amazon is pausing construction of PenPlace — three 22-story buildings as well as the 350-foot Helix center — follows the e-tail behemoth’s largest-ever round of layoffs, as well as refining its policy on employees working from home, the outlet reported.

Amazon has completed phase one of the project — Met Park — and is set to welcome some 8.000 employees to the campus in late spring.

“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’s real estate chief John Schoettler said in a statement, according to the Associated Press.

In 2018, the tech giant announced, following a fierce competition among 238 municipalities, that it would split its second headquarters between Long Island City, Queens, and Arlington. But local opposition led to Amazon scrapping the New York location.

Amazon’s Arlington campus was to accommodate some 25,000 workers, but sluggish sales, fallout from the pandemic concerning remote work and concerns over a possible recession led the company to pause construction on phase two, according to the Associated Press.

The company has called for workers to return to the office at least three days a week, the outlet reported.

No timetable has been released concerning construction on phase two in Arlington, which had state incentives of about $550 million for those 25,000 jobs, the AP reported.

The state has not paid any incentives for the 8,000 workers expected to start work in Arlington in June.

“Amazon is still very much committed — as we understand it — to certainly fulfilling all of their plans and obligations within the window that was envisioned when they struck the deal to come here,” Arlington County Board Chair Christian Dorsey said, according to the AP. “They are really trying to take a pause and think about this consciously. And make decisions that not only make sense in light of current conditions but expected future conditions.”

— Ted Glanzer