After a yearlong search that saw cities compete for its favor, Amazon announced in November that it had picked two locations rather than one for its second headquarters (“HQ2”) project: the Long Island City neighborhood of Queens, New York, and the Crystal City area in Arlington, Virginia, a major suburb of Washington, DC. The choices proved controversial, as the tech giant had made a spectacle of courting many bidders that may never have had a chance, while both New York and Virginia are giving Amazon generous subsidies to set up shop in their states, despite the fact that these locales are strategically desirable locations for tech companies anyway.
While some observers had speculated that Amazon would pick an up-and-coming city in the US heartland, where the introduction of such a huge employer would transform the local economy, in the end, the choice came down to talent, and the New York and DC areas simply offered better access to talent than any other city Amazon was considering. (It’s also setting up a smaller operations center in Nashville, Tennessee — more on that later.) It’s no coincidence, Recode’s Jason Del Rey observed at the time, that the winning bidders were among the country’s leading tech talent hubs:
[W]hat do you see when you look at rankings of the top technology talent pools in the U.S.? Only two metro areas rank above the Washington, D.C., metro area: The San Francisco Bay Area, which Amazon never considered, and Seattle, the home of Amazon’s original headquarters. At No. 3, Washington, D.C., makes a lot of sense. Fourth is Toronto — but despite its booming tech scene, Amazon never gave any hints that it would seriously consider a big move across the border. Which brings us to No. 5 on the tech talent list: New York City.
Ultimately, Amazon decided it needed two cities — whether it always knew this or not is up for debate — to meet its hiring demands and to reduce some of the potential downsides that Seattle has experienced as a result of Amazon’s 45,000-employee footprint there.
Establishing these new headquarters will take years, the Wall Street Journal added this month, perhaps as much as a decade, because Amazon plans to do most of its hiring for them locally rather than relocate workers from its home base in Seattle. By the end of next year, the company plans to add 400 employees in Crystal City and 700 in Queens — out of an expected total of 25,000 in each city by 2028, assuming the e-commerce giant continues its trajectory of rapid growth.
Amazon’s decision underscores the importance of talent communities for major companies making strategic planning decisions with regard to location. While many workers in tech and other digitally-enabled professions can work remotely today, most organizations still prefer to recruit and base the bulk of their workforce in centrally located offices, so it pays to set up shop in a place where the talent you need already lives or would be willing to move.