Amazon sticks with office expansion plans in New York and other locations

The pandemic has upended many companies’ expansion plans. Not Amazon’s.

The tech giant said Tuesday that it would hire 3,500 white-collar employees across the country, including 2,000 in New York, following through on plans it had largely put in place before the coronavirus made office towers empty as employees work from home.

The new Amazon jobs will fill a lot of office space that the company acquired before Covid-19 took hold in the United States. In early March, Amazon bought the iconic Lord & Taylor building on Fifth Avenue from the coworking company WeWork, which was retrenching after unsustainable expansion. The New York Post reported at the time that Amazon had paid $1.15 billion for the property. Amazon declined to comment on the deal.

Amazon expects employees to occupy the space in 2023.

The company also plans to expand offices in its hubs in Dallas, Denver, Detroit, Phoenix and San Diego within two years. It signed a lease for roughly 90,000 square feet near Phoenix in the first quarter, according to Lee & Associates, a commercial real estate broker.

Amazon has 35,000 white-collar employees in more than a dozen tech hubs, so the growth announced on Tuesday would be a 10 percent expansion.

The announcement shows how Amazon, like other large tech companies, has been thriving in the economic chaos of the pandemic. As consumers hunkered down and shopped online, Amazon posted record sales and profits in the most recent quarter. It sold 57 percent more products than a year earlier, and profit doubled to $5.2 billion.

In recent years, the rapid growth of technology firms, both those from the West Coast and local startups, has transformed a broad swath of Manhattan into a vibrant tech hub. The biggest firms — Apple, Amazon, Facebook and Google — have all expanded their footprints in the city, cementing New York City as a global tech corridor.

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The companies have largely settled on the Far West Side, stretching along West 34th Street to the Hudson River and down to the Chelsea neighbourhood. Collectively, they employ roughly 20,000 people in the city, and Google’s campus there has become its largest outside its headquarters in Mountain View, California.

Just this year, Facebook has hired more than 1,000 people in New York City, bringing its total there to more than 4,000. It has plans to hire thousands more for new offices it has recently leased at the Farley Building near Penn Station and down the street at Hudson Yards, the minicity on the Hudson River that is the country’s largest private development.

Amazon backed out of plans to build a second headquarters in New York last year, after fierce criticism from some lawmakers and residents. When the company made that sudden change, executives said they would take the 25,000 jobs it had planned in Queens and spread them around smaller tech hubs, including thousands of jobs in New York. It is proceeding with plans to build a second headquarters, known as HQ2, in the Washington area, where it expects to employ 25,000 people.

Even after dropping its plans for a large corporate campus in Queens, Amazon has continued to invest in the city, expanding its offices in Manhattan and opening warehouses in the other boroughs.

The company had 8,76,800 employees at the end of the quarter, most of them at its warehouses. It also has 4,00,000 drivers delivering packages to customers’ doors, largely working through contractors and as gig workers.

The pandemic has made it hard for real estate developers to find companies to lease office towers that have recently opened, and many commercial tenants are trying to renegotiate leases. Some companies have considered making working from home permanent, and others have backed away from office expansion plans.

Last week, REI Co-op, the outdoor retailer, said it was abandoning plans to occupy the new corporate campus it was building in the Seattle area, saying it will sell the new headquarters and instead distribute its workforce across the region. The company said the change would create more flexibility and have “financial benefits.”