Amazon Pauses Construction on Second Phase of Virginia Headquarters

Move comes after company slashed 18,000 jobs

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Amazon will pause construction of its headquarters in Arlington, Virginia, as the company rethinks space needs and work-from-home policies.

The project, known as PenPlace, is part of Amazon's second headquarters, in suburban Washington, chosen after a nationwide search.

The property would include three 22-story office buildings, a 700-person meeting center and the Helix, a 350-foot tower.

Key Takeaways

  • After announcing 18,000 layoffs at the beginning of the year, Amazon is pausing the second phase of its construction of a new headquarters in Arlington, Va.
  • The pause will only affect one of two projects set for the Washington, D.C. metro area. The first phase of construction is still slated to be completed in time for employees to work in office by June.

Construction hasn't stopped on a nearby complex called Met Park, which has two office towers and is set to have space for more than 14,000 employees, according to John Schoettler, Amazon’s head of real estate. Plans for the Arlington developments were announced in 2017. Schoettler said Amazon has already hired more than 8,000 employees for Met Park campus.

“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,” Schoettler said, according to a statement cited by Bloomberg, which was first to report the news. “We remain committed to Arlington, Virginia, and the greater Capital Region.”

Amazon, like many other corporations and tech companies across the U.S., is assessing its remote work policies as office spaces are used less since the pandemic. In February, Amazon CEO Andy Jassy said the company would require employees to return to the office at least three days a week beginning in March -- and move that employees have pushed back against. 

According to data from Kastle, a building security system that tracks how many employees are accessing the buildings they manage, an average of 46.6% of workers in the Washington, D.C. metro area were in the office from Feb. 16 to Feb. 23.

The pause came after Amazon announced layoffs in late January that are expected to affect up to 18,000 employees.

The company is still planning to expand its presence in Arlington, and is expected to spend $2.5 billion on construction projects, with plans to hire around 25,000 workers by 2030, according to Bloomberg, which first reported the pause. Amazon picked Arlington, alongside a location in New York City, to house its new headquarters, but the New York project was halted after protests from local politicians and activists. Amazon was offered nearly $3 billion in incentives to choose the Queens location as its headquarters, but walked back on the plans in 2019, following the local opposition. 

The company was on its way to increasing its physical presence around the country in the throes of the coronavirus pandemic, which brought on a surge of online marketplaces. It has since pulled back on planned expansions in Nashville and Bellevue, Washington, citing uncertainty around remote work policies.

Article Sources
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  1. Bloomberg, "Amazon Pauses Construction on Second Headquarters in Virginia as It Cuts Jobs."

  2. CNBC, "Amazon pauses construction of second headquarters in Virginia."
  3. Kastle, "Workplace Occupancy."

  4. NBC Washington, "Amazon Pausing Construction on HQ2 in Crystal City, Virginia."
  5. Reuters, "Amazon pauses work on six new U.S. office buildings to weigh hybrid work needs."
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