Amazon is halting construction of its second headquarters in Virginia | CNN Business

CNN
—

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

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

“We decided to change the PenPlace innovation (the second phase of HQ2) 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 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 began in 2017, sparking intense competition as local officials across the country vied for the e-commerce giant to bring jobs and other benefits to their communities. Some 238 communities submitted bids in 2017 to be home to Amazon’s second headquarters, some offering significant tax breaks or even renaming the land an “Amazon City.”

Amazon eventually chose New York and Virginia for its new headquarters after a year-long search, but later abandoned its plans for New York after facing backlash from members of the community

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

Zach Goldsztejn, an Amazon spokesman, told CNN that the hiatus is not a result of or indicative of role cuts at the company. Goldsztejn said Amazon’s long-term intent and commitment to HQ2 remains unchanged, including the company’s plans to bring 25,000 corporate and technology jobs to the new headquarters.

Amazon’s move comes as a growing number of tech companies are rethinking their real estate footprint and investments, amid a tech industry downturn driven by a shift in demand from the pandemic and broader economic uncertainty. Facebook parent Meta, Microsoft, Salesforce and Snap have all closed offices or announced plans to downsize real estate in recent months.

The effect of these setbacks can already be felt across the country, from Atlanta, where Microsoft halted development of a new campus, to San Francisco, where some local businesses say they are facing ripple effects of remote work and the closing of multiple technological offices.

Some community members have said the technology’s withdrawal feels like “broken promises” and have raised concerns about the possible consequences of such moves on their neighborhoods.

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

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