Seattle-based online retailer Amazon.com announced Thursday that it is seeking a second North American headquarters with up to 50,000 jobs.
Amazon.com announced Thursday that it is seeking a second North American headquarters that will employ up to 50,000, setting off a race among big cities eager to house one of the country’s most valuable companies.
The Seattle-based online retailer founded and run by billionaire Jeff Bezos said its «HQ2» would cost about $5 billion to build and operate.
The company, which is currently soliciting bids for the project, said it would prioritize metropolitan areas with more than one million people and that it was encouraging interested communities to think «big» and «creatively» about possible locations.
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Amazon said HQ2 will be a complete headquarters for Amazon — not a satellite office. It said it expects to hire new teams and executives in HQ2, and will also let existing senior leaders across the company decide where to locate their teams.
Employees currently working in HQ1 can choose to continue working there, or they could have an opportunity to move if they would prefer to be located in HQ2, it said.
«We expect HQ2 to be a full equal to our Seattle headquarters, » Bezos said.
«We’ re excited to find a second home.»
Amazon estimated that its investments in Seattle from 2010 through 2016 resulted in an additional $38 billion to the city’s economy. Its rapid growth and demand for highly-paid personnel have contributed to a steep rise in real estate prices, causing the cost of living in the area to skyrocket.
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Today, Amazon has an estimated 40,000 employees working in more than 8 million square feet of office space just north of Seattle’s downtown area — a rare tech company that has fully integrated its headquarters into an urban core, eschewing the sealed-off campus model that Google, Apple and others have embraced.
The company has deliberately not built enough cafeteria space in its multiple buildings so that employees must go out into the city for lunch, as well as for other amenities such as dry cleaning and sundries.
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But its workforce has become so large now that it may have outgrown Seattle. The company is already on track to build out its footprint in Seattle by half over the next five years, according to The Seattle Times.
Adding another headquarters would give Amazon «a second place where senior execs could be, so it opens up a whole new geography for them, » said Rita Gunther McGrath, a professor at Columbia Business School and an expert on corporate strategies.
But attracting and keeping new talent will be a major factor in choosing a location, she says. General Electric’s reasoning for its move to Boston from Fairfield, Conn., «is they wanted to be able to get their fair share of millennials and other young talent, » McGrath said.
Amazon’s physical footprint has already sprawled far from its Seattle headquarters, largely aimed at bringing its retail distribution closer to American households. The company continues to hire software engineers, sales representatives and employees to staff fulfillment centers.
In January, Amazon pledged to add 100,000 new full-time U. S. jobs by mid-2018, many of them at fulfillment centers, including ones being built in California, Florida, New Jersey and Texas. Last month, Amazon held job fairs at 10 U. S. sites to fill more than 50,000 jobs.
In June, the e-retailer announced a $13.7 billion deal to acquire Whole Foods, which has 450 stores across the U. S. and will begin setting up Amazon Lockers in some locations where customers can pick up online orders.
It’s also expanded brick-and-mortar presence at the retail level: Amazon has eight bookstores across the U. S. and on Wednesday, the e-retailer announced plans to establish Amazon «experiences» next month inside ten Kohl’s locations in Los Angeles and Chicago.
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Boeing’s lead
Which cities could be an option?
This new second headquarters will likely be well-situated within Amazon’s increasingly sophisticated logistics and delivery system, which uses its own growing fleet of cargo planes along with its fulfillment centers.
Tougher immigration laws could make Canada more attractive for Amazon, says Jed Kolko, chief economist at job search site Indeed .
But affordable metro areas such as Detroit and Atlanta have more room for corporate expansions, he says. In Chicago, another affordable metro area, Mayor Rahm Emanuel has already pitched the city to Bezos, according to the Chicago Sun-Times.
This isn’t Seattle’s first situation in which a major company has outgrown its Pacific Northwest beginnings. Boeing, which has been in Washington state since 1916, shifted its headquarters to Chicago in 2001. Boeing remains the state’s largest private employer, with 70,000 employees, but its role is much diminished.
Local government incentives will be the biggest factor in attracting Amazon, according to voters in Kolko’s informal poll on Twitter.
«In the end it will have to be someplace where they’ll be able to hire a massive number of skilled tech workers, » Kolko said. «And whichever metro lands HQ2 could end up being transformed, as Seattle has in many ways.»
A business-friendly city that is also looking towards its own future already could have an advantage, says Carlos Carrasco Farré, a researcher at the IESE Business School´s Center for Globalization and Strategy, which ranks smart cities. He is based in Barcelona, Spain, where Amazon also Thursday announced it will open a new research and development center devoted to machine learning.
«Quality of life is an important issue. At the end that will make it easier for Amazon to hire people from outside of the city and move them into this new headquarters, » Carrasco said.
Amazon’s move is a smart strategy for multiple reasons, says Fernando Ferreira, a professor at The Wharton School at the University of Pennsylvania.
