After years of building pricey playgrounds, Big Tech recalibrates

Anyone else remember when cities were desperately pitching Amazon on why they should be home to the company’s second headquarters?

Tucson hauled a 21-foot saguaro cactus to Amazon’s Seattle HQ. Kansas City’s mayor wrote 1k Amazon reviews. NYC lit the Empire State Building orange. Heck, Stonecrest, Georgia, offered to change its name to Amazon.

But it was the bustling metro of Arlington, Virginia, that ultimately received the package: a $2.5B site — opened last week — that will employ 25k people by 2030.

Pumping the breaks

Amazon’s original HQ2 vision promised a $5B complex and 50k employees. The company, which cut ~27k corporate roles this year, has since scaled back, reducing the budget by half and pausing to break ground on a second phase.

It’s not the only tech firm that has reevaluated recent real estate moves amid widespread layoffs and an uncertain economy:

• Meta, which in recent years spent $1B+ on a Frank Gehry-designed Menlo Park campus and bought REI’s Seattle-area headquarters for ~$368m, has eliminated 21k jobs since November, given up leases in NYC, and weathered billions in consolidation-related costs.
• Google, which invested $9.5B in US offices and data centers last year and has been keen on the return to office, announced 12k layoffs in January and paused construction of an 80-acre San Jose campus.

The good news, if you like bananas: Amazon’s new Arlington site comes equipped with a free banana stand, an idea concocted by Bezos himself.