Amazon pauses construction on Arlington headquarters

Amazon has halted construction indefinitely on its second headquarters in Northern Virginia, a major project for the Washington area that the online retail giant said would bring 25,000 jobs to Arlington.

John Schoettler, Amazon’s real estate chief, on Friday said the decision to delay the groundbreaking of the second phase of the enormous new campus in Arlington does not mean the company is pulling out. The first phase remains on schedule to open in June, he said.

“We’ve decided to shift the groundbreaking of PenPlace (the second phase of HQ2) out a bit,” Mr. Schoettler said in a company statement. “Our second headquarters has always been a multi-year project, and we remain committed to Arlington, Virginia, and the greater Capital Region.”

Amazon has hired more than 8,000 employees to work at the first phase, Metropolitan Park, starting in June, Mr. Schoettler said. 

Amazon’s decision to pause construction comes two months after CEO Andy Jassy announced layoffs of 18,000 employees who were hired rapidly early in the pandemic, as part of a broader cost-saving initiative.

In media appearances on Friday, Amazon officials denied any connection between the layoffs and the decision to halt the Arlington work.

The job cuts were part of a broader cost-cutting move to trim its growing workforce amid more sluggish sales and fears of a potential recession. Meta, Salesforce and other tech companies — many of which had gone on hiring binges in the past few years — also have been trimming their workforce.

Amid the job cuts, Amazon has urged its employees to come back to the office. Last month, Amazon CEO Andy Jassy said the company would require corporate employees to return to the office at least three days a week, a shift from from the prior policy that allowed leaders to make the call on how their teams worked. The change, which will be effectively on May 1, has ignited some pushback from employees who say they prefer to work remotely.

The company’s delayed project, PenPlace, includes three 22-story office buildings, more than 100,000 square feet of retail space and a 350-foot-tall tower that corporate officials call “The Helix.” The development is north of Metropolitan Park, a smaller footprint that includes two 22-story office buildings and a mixed-use retail and restaurant site with green space.

Amazon spokesperson Zach Goldsztejn said the company is expecting to move forward with what he called pre-construction work on the project later this year, including applying for permits. He said final timing for the second phase of the project is still being determined. The company had previously said it planned to complete the project by 2025.

The Seattle-based company began the search for a second headquarters in 2017, attracting bids from 238 municipalities.

After a year, Amazon picked New York City and Virginia for its new headquarters. But the company abandoned plans for the site in Queens after liberal city lawmakers and local activists pushed back, questioning the company’s labor practices in opposition to then-New York Gov. Andrew Cuomo and then-Mayor Bill Di Blasio, both Democrats, who supported the project.