Categories

Archived Posts

Why Did Amazon Decide on Having 3 Corporate Headquarters?

Nov 14

So, the biggest news of the week is Amazon finally made a decision on where they were going to build HQ2 and come to find out instead of just one location, Amazon is splitting the job lottery into two prizes and both Washington D.C. and New York will get an Amazon Headquarters. Okay, it’s probably really about 4 Headquarters since they’re really focusing a ton of the supply chain talent in Nashville, but who’s counting!?

I never really thought Washington D.C. or New York City had a chance because I was thinking about stuff like the ability to actually move around! Turns out Amazon’s real decision point came around brain power. Now, I know what you’re thinking! There are absolutely no brains in Washington D.C.! Hello, is this mic on!? Also, have you been the urine-scented streets of New York!? Joking!

If you look at the U.S. and did a heat map around higher education institutions you would find a gigantic section of the Eastern seaboard is shaded a bright red! From Boston to New York to Philadelphia to Washington D.C. you can’t find a more concentrated area of higher education in the world! Amazon’s newest HQ2 and HQ3 will be strategically located right amongst those areas!

The largest employers in the U.S. look like this:

Walmart is stupid big, but almost all of their employees are onsite at stores.  Accenture is huge, but again their employees work in every medium to large city in the country, not a one big headquarters. FedEx is basically the US mail service. Go down the list and you’ll most of the largest employers are not headquartered centric, but location-centric.

Amazon is the lone giant employer who has most of its employees in office buildings. Knowing they were going to have to hire 50,000+ employees, there was really no one location in the U.S. that could have handled that need for talent in such a short time. Washington D.C. and New York are probably two of the places that can handle 25,000 new jobs, each, without crippling every other employer in the market. And, this will still cause a giant disruption in those cities as people will be moving around like crazy.

An additional 5,000 white collar jobs in Nashville will be an incredible amount for that market, especially in the key skills they’re looking for which are desperately needed everywhere in the U.S. right now. Better dust off your employee engagement strategies and update your compensation models, Nashville employers! 2020 is going to be a tough year!

This decision signals one other potential massive shift for IT. Washington D.C. was already a pretty big IT hub with all the government work, but now moving this many IT related jobs to the East Coast could begin a big shift away from organizations believing you have to be in Silicon Valley to hire IT talent. Amazon will bring and grow IT talent for the entire east coast and strengthen those cities as large IT hubs worldwide.

Amazon definitely didn’t help workers out from a quality of life standpoint. Both D.C. and NYC are awful in terms of cost and commute, at least in California you get sunshine in your closet of an apartment!

The decision for me showed that Amazon truly looked at labor markets and demographics (and some giant tax breaks – which, let’s be honest, everyone was willing to give) as the major decision points in the location of the new headquarters. The U.S. demographics over the next decade should be a major concern for large employers. More workers will leave the workforce than are coming into the workforce, so you better be close to where we tend to grow white collar, educated workers.

This is a win for higher education as much as it is for Washington D.C. and New York City.

Leave a Reply