Amazon halts construction of 2nd headquarters in US to cut costs

San Francisco: As it cuts costs across the verticals amid the ongoing economic meltdown, Amazon has now halted construction of its second headquarters in the US.

Called 'HQ2', the second headquarters of the e-commerce company is being built in the state of Virginia (its first HQ is in Seattle, Washington State).

John Schoettler, Amazon's real estate head, said in a statement the company is pushing out the groundbreaking of PenPlace, the second phase of the sprawling northern Virginia campus, reports CNBC.

"We're always evaluating space plans to make sure they fit our business needs and to create a great experience for employees, and since Met Park will have space to accommodate more than 14,000 employees, we've decided to shift the groundbreaking of PenPlace (the second phase of HQ2) out a bit," Schoettler said.

The first phase of the campus is expected to open on time in June this year, which will house 8,000 employees.

In 2019, the e-commerce giant had announced to halt plans to build its new headquarters in New York after it faced pushback from local activists and city council leaders.

Amazon recently laid off 18,000 employees among its corporate workforce, after cutting a number of employees in November last year.

"In the short term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon," according to Amazon CEO Andy Jassy.

"We're working really hard to streamline our costs and trying to do so at the same time so that we don't give up on the long-term strategic investments that we believe can meaningfully change broad customer experiences and change Amazon over the long-term," Jassy said on the analysts' call last month.