While Amazon’s decision to chose fashion hub New York City and Northern Virginia as the locations for its new headquarters is no great surprise, the fact the online behemoth has chosen to split its new headquarters across two cities is a twist that many did not see coming.
In an announcement yesterday (13 November), after more than a year of speculation and a contest in which major cities vied for Amazon’s favour, the tech giant said it has chosen both New York City and Arlington, North Virginia.
Amazon will invest US$5bn and create more than 50,000 jobs across the two new headquarters locations, with more than 25,000 employees each in New York City and Arlington. The new locations will join Seattle as the company’s three headquarters in North America. In addition, Amazon announced that it has selected Nashville for a new Center of Excellence for its operations business, which is responsible for the company’s customer fulfilment, transportation, supply chain, and other similar activities. The Nashville centre will create more than 5,000 jobs.
The new Washington, DC metro headquarters in Arlington will be located in National Landing, and the New York City headquarters will be located in the Long Island City neighbourhood in Queens. Hiring at both will begin in 2019. The Operations Center of Excellence will be located in downtown Nashville as part of a new development site just north of the Gulch, and hiring will also begin in 2019.
“We are excited to build new headquarters in New York City and Northern Virginia,” said Jeff Bezos, founder and CEO of Amazon. “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.”
Neil Saunders, managing director of GlobalData Retail, notes that the locations themselves are logical and do not come as any great surprise.
However, the fact that Amazon has chosen to split its new headquarters across two cities is more interesting, he says. “In our view, the split reflects two things. First of all, the sheer size and scale of Amazon and its interest across many areas of technology, retail, and various consumer services. This arguably warrants multiple HQ locations as opposed to a couple of large offices.
“Second, Amazon’s forecasted strong growth means it wants to avoid the issues it had in Seattle where its expansion caused problems with the supply of labour, property, and put pressure on general infrastructure. Being able to balance growth across numerous cities will help alleviate such issues.”
The locations themselves make sense, Saunders adds. New York is a global hub for many activities, including fashion and finance, which are categories that Amazon wants to develop. While the proximity of Crystal City to Washington DC will be beneficial in terms of developing political links – something Amazon may need to do more of as it grows and comes under increasing political scrutiny, he says.
Meanwhile, the Virginia HQ will also prove helpful if Amazon makes bolder moves into highly politicised and regulated sectors such as healthcare.
“While other locations may be disappointed not to have secured Amazon’s favour, it does not mean they will miss out entirely. Amazon is making enormous investments in warehousing, regional hubs and in retail stores. The company will expand both its customer-facing and back-end operations across America, and the world, in the years to come.”