Amazon announced it would push back the construction of its $2.5 billion second corporate headquarters, dubbed “HQ2” in Northern Virginia, largely due to a sour economy and financial cutbacks at the company.
The digital retail behemoth has expected to open the first phase of “Met Park” in June, 2023. The planned facility could reportedly accommodate 14,000 employees, with 8,000 staffers already hired for the second headquarter location in Arlington, Va.
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Amazon's Construction Hits a Snag
The second phase, called PenPlace, is the focus of the construction pause. Once completed, the facility will include 2.5 acres of open public space, as well as a dog run, amphitheater, restaurants, and a retail pavilion. PenPlace would also include three 22-story office towers.
Amazon had purchased the land for $198 million in a deal with JBG Smith in 2022, but will hold off on the second-phase construction after reports of financial strife at the company, currently ranked second on the Fortune 500 list.
Amazon recently laid off 18,000 employees and company CEO Andy Jassy is looking to curb spending, including Amazon’s ambitious real estate plans.
"We're working really hard to streamline our costs and trying to do so at the same time that we don't give up on ... long-term strategic investments," CEO Andy Jassy told analysts on an early February conference call.”
Amazon officials say the pause is only temporary, and that the company was standing firmly with its plans for HQ2.
“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,” John Schoettler, Amazon’s real estate head said in a statement. “Our second headquarters has always been a multi-year project, and we remain committed to Arlington, Virginia, and the greater Capital Region.”
The news of the HQ2 pause was first reported by Bloomberg.
