After months
of deliberations, data dumps, short lists and wish-lists, Amazon has finally
announced the location of its second headquarters, HQ2, and as it has been
widely reported, “2” is the important detail here: Amazon has named not one,
but two different cities, New York (specifically, Long Island City in Queens)
and Arlington, Virginia, as the sites for its new major offices, which will sit
alongside its current Seattle, WA location — making three global headquarters
for the e-commerce and cloud services giant.
Separately,
Amazon said Nashville will also become a new Center of Excellence for its
Operations business. It will be focused on fulfillment, transportation, supply
chain and related areas, with 5,000 jobs to be filled.
“We are
excited to build new headquarters in New York City and Northern Virginia,” said
Jeff Bezos, founder and CEO of Amazon, in a statement. “These two locations
will allow us to attract world-class talent that will help us to continue
inventing for customers for years to come. The team did a great job selecting these
sites, and we look forward to becoming an even bigger part of these
communities.”
Amazon says
it will invest $5 billion ($2.5 billion in each location) and create more than
50,000 jobs across the two new locations, with more than 25,000 employees each in
New York City and Arlington.
But it will
also be getting some money, too. Specifically, “Amazon will receive
performance-based direct incentives of $573 million based on the company
creating 25,000 jobs with an average wage of over $150,000 in Arlington,” and
“Amazon will receive performance-based direct incentives of $1.525 billion
based on the company creating 25,000 jobs in Long Island City,” the company
noted.
The new
Washington, D.C. metro headquarters in Arlington will be located in National
Landing, and the New York City headquarters will be located in the Long Island
City neighborhood in Queens, Amazon said.
It’s hard to
say whether this was not just an elaborate marketing ploy, where Amazon was
able to amass a huge swathe of data of a run of cities across the U.S. — which
it can now use to build out other services in those regions more intelligently
— rather than a genuine search for a location (or locations, as it turned out)
that, at the end, of the day, felt very obvious when you think more about it.
The
selection of New York and Washington, D.C. are notable nonetheless. In both
cases, they are very strategic choices for Amazon:
Arlington
puts Amazon in striking distance of DC — it is only three miles away from the
city, Amazon notes — which is a huge market for the company in terms of
government procurement and its AWS business, but perhaps even more importantly
because of its increasing need to play nice with regulators. Positioning itself
close to the halls of power gives it a much more immediate relationship, making
it far less remote than the rest of the tech world.
At a time
when we are seeing a lot of friction between the tech and government — Amazon
getting called out specifically by President Trump, who also happens to hate
the newspaper owned by Jeff Bezos, The Washington Post — it will be interesting
if Amazon’s approach of promoting access to itself by way of proximity will
give it a warmer place in Washington.
New York, on
the other hand, gives the company a base much closer to the media industry and
also the world of finance.
Amazon is
shaping up to be a huge advertising behemoth — on par with Google and Facebook
among tech players that have upended traditional advertising leaders. And it
has also become a content juggernaut in its streaming business, alongside
publishing and other areas where it was already strong. It so happens that NYC
is the unofficial capital of both of those industries, advertising and content.
Putting itself in the heart of all that is a symbolic move, but also a
practical one as Amazon seeks to partner with more of these companies in its
growth. Before it eats them all up, at least. :-)
What will be
interesting to see is how Amazon develops and whether it will continue to view
Seattle as its spiritual home and “real HQ,” or whether it really does make a
significant shift of power and administration to these other locations. It’s
worth noting that the company has made huge efforts globally to build large
centers of operations and R&D, so it’s no stranger to globalization and
distributed work.
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