Amazon’s decision to split its second headquarters, known as HQ2, between two locations is driven chiefly by the need to recruit top tech talent.
In September 2017 the world’s biggest online retailer unveiled plans to launch a second headquarters, known as “HQ2,” which it said would be a “full equal to our current campus in Seattle.” The new campus would bring up to 50,000 new jobs and a $5 billion investment in construction. A bidding frenzy ensued, with well over 200 bids pouring in from cities across North America, all offering attractive incentive packages to woo the ecommerce giant.
Now, after more than a year of heated competition, Amazon announced that it will split the headquarters between two cities evenly. It is zeroing in on Long Island City in Queens, New York, and the Crystal City area of Arlington, Virginia, outside Washington D.C. “If Amazon goes ahead with two new sites, it is unclear whether the company would refer to both of the locations as headquarters or if they would amount to large satellite offices,” the New York Times notes
The driving force behind the search, and ultimately the decision to split HQ2 in two, is Amazon’s need to recruit top talent, including tens of thousands of high-tech workers. Being able to offer job candidates a choice of head offices could give it an edge against Google and other big technology companies, against which it competes in areas such as cloud computing and voice recognition, as well as in the battle for tech talent.
“Amazon is going where it won’t have to jostle with Google and Facebook as much as it would in San Francisco or it does in Seattle,” observed Alex Snyder, an analyst at CenterSquare Investment Management.
The talent factor had industry watchers conjecturing early on that Amazon would lean toward America’s major East Coast metropolitan areas, far away from competitors, but close to rich talent pools. As Reuters reports, the HQ2 split “could help Amazon ease the same degree of congestion and jump in costs of living that led to unrest in Seattle.” Were Amazon to concentrate its next big ecommerce operation in a single location, this unfortunate history could repeat itself.
Drawing on East Coast talent could also bring greater diversity to Amazon’s workforce. “Not everybody wants to live in the Northwest,” said Jeff Wilke, Amazon’s CEO of Worldwide Consumer at a conference last year. “It’s been terrific for me and my family, but I think we may find another location allows us to recruit a different collection of employees.”
