Amazon slows forecast on HQ2 job growth as D.C. region hurts for employment

Washington Post

25-04-2025

When Amazon executives and Virginia state officials inked a deal to bring the company's second headquarters to Arlington, they laid out a timeline for the tech giant to gradually add 25,000 new jobs at that site by the end of this decade — or at least by 2038.
More than six years and 7,000 new positions later, though, the company is not so sure it will hit that target in time — just as the Washington region needs additional private-sector positions more than ever.
Amazon's most recent application to Virginia for taxpayer subsidies said that its confidence it would meet that jobs target had dropped to a 'moderate' level, according to a copy of the application obtained through a public records request. Every previous annual Amazon report to the commonwealth detailing its job growth at the HQ2 site noted a 'high' level of confidence in the employment goal.
'Our second headquarters has always been and continues to be a long term investment, and we are proud of the progress we have made,' Holly Sullivan, an Amazon vice president, wrote in the application requesting more than $6.4 million in incentives from Virginia. 'While we experienced incremental job growth in 2024, we exceeded hiring goals in previous years.'
The company had already been veering off its planned road map for growth in Arlington: In early 2023, Amazon halted its plans to break ground on the largest part of the new headquarters. That year, its workforce at HQ2 shrank, losing about 300 qualifying positions rather than adding the thousands anticipated in a deal signed in late 2018. (Amazon founder Jeff Bezos owns The Washington Post.)
Amazon is back to adding new positions this year — just under 300 that qualify for state incentives — but that sluggish growth comes at a particularly volatile time for the job market in its second home. President Donald Trump's efforts to slash federal positions and spending are dragging down a D.C. regional economy that is heavily reliant on the U.S. government and needs high-paying private-sector jobs to soften those economic blows.
'What would hope to be a mainstay of future growth is becoming a question mark,' said Mark Muro, a senior fellow at the Brookings Institution who studies the geography of the tech industry. 'And it is a challenging time for this region, with more question marks than clear ways forward. … It's kind of a perfect storm, isn't it?'
When cities across North America competed for the economic-development grand prize of Amazon HQ2, boosters for a D.C.-area bid pitched the project as a way to diversify the local economy and protect it from an overdependence on federal spending. But as Trump's cuts send the public sector into free fall, Amazon's stunted growth means it is hardly the cushion those officials had foreseen.
Sullivan, Amazon's vice president of worldwide economic development, said in a statement that the company's impact in Northern Virginia and the D.C. area goes beyond its qualifying jobs or physical footprint in Arlington.
The company has put $1.2 billion toward creating or preserving affordable housing and boosting regional nonprofits, she said. Executives have brought in more than a dozen small, local businesses to open street-level retail at its two soaring office towers in the Crystal City neighborhood, where more than 8,300 Amazon employees are required to work in person five days a week.
But that may be less effective at counteracting the federal cuts, Muro said, in an area where local officials had hoped to create a 'tech hub' concentrated on HQ2 and the region's large concentration of defense contractors — another industry that is likely to be affected.
About 8.4 percent of workers in the District, Maryland and Virginia — or nearly 687,000 people — are employed by the federal government, one of the largest concentrations of such employees around the country. Amazon's neighborhood alone is home to a handful of federal agencies, including the Drug Enforcement Administration and the U.S. Marshals Service, as well as the Pentagon just a few blocks from HQ2.
Economists have warned it is still too early to measure the full impacts of the Trump administration's federal spending cuts. Yet signs of strain exceeding the impact of the pandemic are starting to show: More than 6,500 D.C.-area workers captured in unemployment data were laid off in the first three months of this year, according to a Post analysis earlier this month.
Meanwhile, the country's largest tech companies — including Amazon — have slowed their growth as they continue to face economic headwinds. In a letter to shareholders earlier this month, CEO Andy Jassy signaled his focus on growing Amazon's network of fulfillment centers and artificial intelligence efforts while 'rooting out bureaucracy' and getting 'the most done with the least number of resources.'
Muro, of Brookings, said Amazon's aggressive pursuit of AI could likewise slow its hiring efforts. 'The tech industry itself is no longer the generator of thousands of local jobs here or in most regions,' he added.
The company has added more jobs than listed in the application — about 8,330 employees were working at HQ2 as of the end of last year, including 534 new positions added last year — but any positions must meet certain criteria on salary, location and other factors to qualify for state subsidies.
Amazon said in its application for Virginia incentives that it had 7,232 qualifying jobs in Arlington, including 293 new positions added last year.
Economic development experts, including Muro, have generally praised Virginia for the structure of its incentives package, which rewards the company with taxpayer dollars only for jobs it has already created and maintained. No money has been paid out to date.
Both jobs figures are still short of the 14,000-worker capacity at the two existing buildings that opened in mid-2023, known as Met Park. Several floors in one of those two towers will begin housing an Arlington alternative high school, which had initially meant to go down the street at PenPlace — the part of the HQ2 campus where officials still have not broken ground.
Construction permits to break ground on that phase of the project, including a futuristic 'Helix,' were set to expire this month. Arlington County Board members in June will consider a request from the company to extend those permits.