Amazon Pauses Work on Six Office Towers Amid Hybrid Work Demand

Amazon, which in recent weeks delayed the opening of several newly built warehouses for up to two years, now says it’s pausing construction on five office towers in Bellevue, WA and another in Nashville in order to re-evaluate its office needs in both of those locations. 

The e-commerce giant announced it has adopted a hybrid work strategy for corporate and tech positions and says it needs the construction pause on the office-tower projects to determine whether to revise office floor plans before the new buildings are completed.

“The pandemic has significantly changed the way people work. For our corporate and tech roles, we’ve adopted a hybrid model that offers employees increased flexibility. Each team decides the balance between in-office and remote work that makes sense for them,” said John Schoettler, Amazon’s VP of global real estate and facilities, in a statement.

“It’s early days, and like many companies, we’re still learning how these new habits may impact our office footprint,” Schoettler said.

Amazon did not provide a timeline for when it will resume construction work on the new office towers. All six office towers are located in metros where Amazon is the largest employer.

In Bellevue, WA, Amazon will pause construction on four office towers that are being built by Vulcan—the 555 Tower, Towers 1 and 2 at West Main and Bellevue 600—that together encompass about 3M SF. The tech giant will also pause construction on a 23-story office tower known as The Artiste.

According to a report in the Seattle Times, Amazon will complete the core and shell, as well as the lobby, communal areas and retail spaces, of most of the buildings it is pausing in Bellevue, before halting construction completely.

Amazon will complete the working floors up to the 19th level for the 42-story 555 Tower but is shutting down construction on its sister tower at Bellevue 600.

The Bellevue office-tower projects were planned to support the creation of 25,000 jobs in the Bellevue area, which would have put the metro on par with Amazon’s HQ2 project in Arlington, VA as the e-commerce titan’s second largest office hub. Amazon’s largest campus remains its Seattle HQ complex, which is spread over more than a dozen buildings and employs more than 50,000 workers.

According to the Seattle Times report, Amazon has told city officials in Bellevue that it still plans to increase its workforce in the city to 25,000 positions despite the construction slowdown.

In Nashville, Amazon is pausing construction on a 20-story office tower—the core, exterior, amenity spaces and communal working areas have already been completed—that as planned would have nearly doubled the online retail giant office’s footprint in the city to a total of more than 1 million square feet.

Last summer, Amazon completed the building’s twin, a 566,000 square foot tower with street-level retail outlets.

Since it revealed during a Q1 earnings call that it overestimated the e-commerce growth rate and overextended its logistics network—resulting in a loss of nearly $4 billion, its first quarterly loss since 2015—Amazon has been sharing its pain in towns across the US.

In a multitude of locations, during the past three months the e-commerce behemoth’s foot soldiers have informed city managers and economic development agencies that what they thought was going to be the crown jewel of local economic development—a brand new Amazon fulfillment center, and the minimum of 1,000 jobs that come with it—won’t be happening anytime soon.

In places where giant new warehouses stand ready for ribbon-cuttings this year, Amazon informed the locals that these sparkling white, rectangular monuments to growth would stand empty for the next two years and there would be no new jobs, GlobeSt.com reported.

In rural communities where Amazon had purchased a large tract of land and local planning officials had approved the development of an Amazon fulfillment center on the site, the company abruptly canceled the projects before ground was broken.