The company was supposed to gradually add 25,000 new jobs at HQ2 by the end of the decade, according to its agreement with Virginia, and receive money from the commonwealth as it hit annual hiring targets — such as 2,665 new jobs last year.
Instead, Amazon lost hundreds of existing positions in Arlington in 2023 — a sharp turnaround that executives attributed to layoffs and a slowdown in hiring across the company. (Amazon founder Jeff Bezos owns The Washington Post.)
“Last year we made the tough decision to eliminate a small percentage of corporate roles and to slow hiring around the globe, which impacted our forecast growth in HQ2,” Holly Sullivan, the company’s vice president of worldwide economic development, said in a statement.
Sullivan said the company has not abandoned its target of 25,000 jobs, though she did not specify whether the company is on track to meet that goal by 2030. She called HQ2 “a long-term investment” and noted that there are 1,000 open positions for the campus, where two soaring office towers — part of a total $2 billion investment — opened last year.
But amid a shift in work habits prompted by the coronavirus pandemic and a squeeze in the tech industry, the downturn in hiring marks another setback in the boost Amazon had initially promised. The rise of remote and hybrid work has challenged tech industry job centers, and the growing “innovation district” in Arlington has been no exception.
The HQ2 buildings that Amazon opened last year in the Crystal City neighborhood have room for 14,000 employees, more than twice as many as currently work on-site — where they are required to come in-person three times a week. The company has for more than a year paused construction on three other office buildings and the futuristic “Helix” that are supposed to be built at HQ2, even as its contractor began installing utilities there last month.
Amazon continues to grapple with economic headwinds following the coronavirus outbreak, despite record-high stock performance. While the tech giant that pitted cities against each other for the economic prize of HQ2 was known for innovating and doing it all, the one that actually built that office just shuttered the doors of an Amazon Fresh grocery store just a few blocks away.
Amazon has laid off more than 27,000 employees between 2022 and 2024, though no layoffs affected enough employees at HQ2 at once to trigger WARN notices in Virginia. The company’s chief executive, Andy Jassy, said in a letter to shareholders last week that he expects the company will cut more costs as it looks to become more efficient.
The drop-off in hiring in Arlington will probably affect how much money Amazon will receive from Virginia. To qualify for those subsidies, Amazon must submit a document to the commonwealth every spring detailing its total hiring progress at HQ2 since 2019. (Not all jobs necessarily qualify for state subsidies, which are subject to specific criteria.)
A comparison of reports from last year and this year shows that Amazon lost jobs no matter how you count. The company’s application last April said Amazon had hired 6,939 employees for qualifying jobs, out of 8,430 total positions in Arlington. Amazon’s report this year said it had filled 6,644 qualifying jobs and had 7,791 total employees assigned to HQ2.
Virginia’s incentives for the company are supposed to reward its progress toward a goal of bringing 25,000 new jobs to Arlington by 2030. They are also structured to ensure that the company maintains those new jobs for at least five years.
State officials will pay the company $22,000 for each full-time job with an average salary of $150,000, according to the contract. (That salary is supposed to climb slightly each year.)
Amazon’s application last year asked the state for nearly $153 million in taxpayer subsidies to be paid by late 2026. The hiring slump reflected in the most recent report probably means Virginia’s payout could drop by several million dollars if hiring stays flat in the next year and a half.
Christian Martinez, a spokesman for Gov. Glenn Youngkin (R), deferred comment to the Virginia Economic Development Partnership, which reviews the company’s applications for incentives. A spokeswoman for that agency did not immediately respond to a request for comment.
Because the company submitted a “progress report” instead of a formal application this year, Virginia will not pay Amazon any incentives in 2027. The company had also declined to apply for incentives from the commonwealth until 2021, citing pandemic-related challenges, even though it had consistently been ahead of schedule on hiring at HQ2.
This year’s report marks the first time that Amazon has fallen behind on its hiring goals in Arlington.
In addition to the money from Virginia, the incentives package designed to woo Amazon there also included up to $23 million in taxpayer subsidies from Arlington County. None of those incentives have been paid out yet.
Amazon’s deal with Arlington was negotiated with the expectation that having such a large company in town would help fill up hotel rooms: The county promised to give the tech giant a 15 percent cut of any increase in its local hotel tax. That revenue stream, however, had not yet fully recovered from the pandemic as of last fall.
But Arlington County Board Chair Libby Garvey (D) said the hiring slowdown was not cause for concern — it was to be expected.
“Arlington’s businesses — like most of the nation’s — have seen the lasting impact of the pandemic on workplace trends,” she said in an interview. “Amazon is no different. We’re actually thrilled with the company’s progress.”
Dozens of new retailers have opened at the HQ2 office towers that opened last year. Garvey said that the area “is so vibrant, so alive, and that’s because of Amazon’s presence … They are adjusting well.”
Caroline O’Donovan in San Francisco contributed to this report.
