Amazon has abruptly dropped plans for a new headquarters in New York that would have brought 25,000 jobs to the city, reversing course after politicians and activists objected to the nearly US$3bil in incentives promised to what is already one of the world’s richest, most powerful companies. “We are disappointed to have reached this conclusion – we love New York,” the online giant from Seattle said in a blog post announcing its withdrawal. Amazon announced in November that it had chosen the Long Island City section of Queens for one of two new headquarters, with the other in Arlington, Virginia. Both would get 25,000 jobs. A third site in Nashville, Tennessee, would get 5,000. The company planned to spend US$2.5bil (RM10.2bil) building the New York office, choosing the area in part because of its large pool of tech talent. The governor and the mayor had argued that the project would spur economic growth that would pay for the US$2.8bil in state and city incentives many times over.
Meanwhile, experts said the decision by the e-commerce giant to walk away and take with it 25,000 promised jobs could scare off other companies considering moving to or expanding in the city, which wants to be seen as the Silicon Valley of the East Coast. “One of the real risks here is the message we send to companies that want to come to New York and expand to New York,” said Julie Samuels, the executive director of industry group Tech: NYC. “We’re really playing with fire right now.” Other tech companies have been keeping New York City’s tech economy churning without making much of a fuss. Google is spending US$2.4bil to build up its Manhattan campus. Cloud-computing company Salesforce has plastered its name on Verizon’s former headquarters in midtown, and music streaming service Spotify is gobbling up space at the World Trade Center complex.
Despite higher costs, New York City remains attractive to tech companies because of its vast, diverse talent pool, world-class educational and cultural institutions and access to other industries, such as Wall Street capital and Madison Avenue ad dollars. No other metropolitan area in the US has as many computer-related jobs as New York City, which has 225,600, according to the Bureau of Labor Statistics. But San Francisco, San Jose, Seattle, Washington, Boston, Atlanta and Dallas each have a greater concentration of their workers in tech. In the New York area, the average computer-related job pays roughly US$104,000 (RM424,000) a year, about $15,000 (RM61,000) above the national average. Still, that’s about US$20,000 (RM80,000) less than in San Francisco.