In 2018, when Amazon said it planned to build a second headquarters in Virginia and a sister office complex in New York, it was a symbolic moment for the tech sector’s importance to the U.S. economy.
But the company’s decision to suspend that work in Virginia, made public Friday — nearly four years after Amazon pulled out of its expansion plans in New York — is the latest reminder that the tech industry’s long boom has slowed.
It’s another sign that the pandemic may have permanently changed office jobs, presenting new challenges to societies that anticipated the growth of technological offices.
The decision to delay the major construction project, known as HQ2, comes as Amazon and other big tech employers make the most significant cuts to their workforce in at least 15 years.
Companies are also at a loss as to what to do with their offices because their workers spend at least part of their time working from home. Nearly three years after the pandemic shut down workplaces, some tech companies have asked their employees to return to the office full-time.
In the big tech world
“Having HQ2 on hiatus is emblematic of the hiatus technology has hit across the industry,” said University of Washington marketing professor Jeffrey T. Shulman said, he researched Amazon’s hometown of Seattle. “HQ2 is the perfect symbol of where we’ve been, where we are, and how different we are.”
The HQ2 project consists of several development clusters in Virginia, across the Potomac River from Washington. The suspension will affect Benplace, which will create a mix of office towers, open space and a signature, spiraling glass building called the Amazon Helix.
The first phase of construction, an adjacent complex called Med Park, consists of two office towers and is scheduled to open to employees in June.
The retreat makes future investments by developers and small businesses uncertain, Mr. Shulman said. “It has ripple effects where confidence in something that seemed unmissable when they announced it is now being shaken,” he said.
Construction delays were reported earlier Bloomberg News And Amazon’s head of real estate, John Schoedler, confirmed Friday. “We are always evaluating space programs to meet our business needs,” he said in a statement.
Andy Jassy, who took over as Amazon’s chief executive in July 2021, spent the past year pushing the company to cut costs after Amazon expanded rapidly to meet a pandemic boom in online shopping and services.
Last summer, amid uncertainty about how cost-cutting and hybrid jobs would play out, Amazon It caused a break in the construction of several towers Bellevue, Wash., near its headquarters in Seattle. The new offices were planned to accommodate 25,000 employees.
Then in November, Amazon began laying off about 10,000 workers, expanding the number of layoffs to 18,000 in January.
Tech companies, hit by shrinking their biggest workforces since the dot-com bust and the pursuit of remote work, have scaled back their expansion plans to allow them to cut real estate costs.
Google Backed out of a big project Microsoft announced layoffs in January to make room for 6,000 workers near Seattle Some work was delayed In the renovation of its headquarters complex. Yelp vacated its headquarters in San Francisco, where Salesforce has Rent should also be reduced.
The recession, combined with the persistence of remote workers, has often replaced cities that relied on tech workers with cafes, doggy day care and transit.
Last month, Mr. Jazzy wrote in a letter Most corporate employees are expected to return to the office for three days in the week beginning May 1. That prompted grumbling from some Amazon workers, but cheers from city officials in Seattle and Bellevue.
The slowdown in Amazon’s HQ2 is perhaps the best indication of how quickly the tides have turned from the ambitions of just a few years ago.
In late 2018, Amazon announced plans to open secondary headquarters in Queens and Arlington, VA. At the time, the company said the development would require $5 billion in construction and other investments. Company said Arlington, Va., will bring more than 25,000 jobs to the region.
In early 2019, Amazon scrapped plans for a corporate campus in Long Island City, Queens, after facing a fierce backlash from activists, lawmakers and union leaders.