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Amazon pauses groundbreaking of second phase of new headquarters

amazon helix HQ tower
Rendering of the ‘Helix Tower’ planned for Amazon’s HQ2.

Amazon’s latest cost-cutting move is in the real estate area.

According to CNBC (following up on news first reported by Bloomberg), Amazon is delaying groundbreaking on the second phase of its second headquarters in Northern Virginia, known as “HQ2.” The e-tailer still currently plans to open the first phase of its new corporate campus as scheduled in June 2023.

In 2018, Amazon announced it would spend more than $2.5 billion to build a second headquarters in Arlington, Va. In 2021, the company unveiled plans for phase one of the project, known as Metropolitan Park, or “Met Park.”  In 2022, the Arlington County Board gave unanimous approval to Amazon's plans to build 350-ft. office tower, called “The Helix,” as well as several other office towers and park space, as part of phase one. 

“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,” an Amazon spokeperson said in a statement to CNBC. “Our second headquarters has always been a multi-year project, and we remain committed to Arlington, Virginia, and the greater Capital Region.”

Read more from CNBC here.

Amazon cuts staff

Amazon’s decision to push back completion of its HQ2 construction project follows a number of initiatives designed to reduce headcount. In November 2022, Amazon publicly announced it has decided to “consolidate” some teams and programs in the devices and services organization (responsible for product lines such as Amazon Echo and Kindle devices).

The company also announced a voluntary reduction offer for some employees in its People, Experience, and Technology (PXT) organization. As a result, Amazon said an unspecified number of jobs are being eliminated.

At the beginning of 2023, Amazon said it plans to eliminate just over 18,000 roles in 2023, with the majority of eliminations in its Amazon Stores and PXT organizations. Around that time, the Amazon Shopping organization laid off its entire user experience research staff of about 14 people.

Previous media reports had indicated Amazon was preparing to begin eliminating 10,000 corporate and technology roles, starting in November 2022. Those jobs were said to primarily be in the areas of devices, retail, and HR.

These job cuts follow a recently announced hiatus in corporate hiring. The company has previously said it still intends to hire a “meaningful number of people” in 2023. Other cost reduction efforts have included shuttering the Amazon Smile program, which donated 0.5% of a participating customer’s purchase to a charity of their choice.

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