Amazon today announced that it’s initiating a formal search for a second North American headquarters city in addition to its current HQ in Seattle, and invited cities to make pitches to win its business with a formal RFP process. The approach here is reminiscent of Google Fiber’s strategy of inviting cities to pitch to host its early networks, a process that resulted in tax breaks and other concessions intended to lure Google to municipalities, and Amazon is clearly aiming for very much the same approach here, hoping to get big tax breaks and other incentives. The driver here is twofold. Firstly, this is a PR move intended to get lots of positive attention from cities around the US both during the process and once it’s completed and it starts creating jobs and other economic activity in an area.
Secondly, it’s a practical issue: Amazon has grown to over 40,000 employees in Seattle, a big coastal city with a high cost of living and doing business, and with another massive tech company – Microsoft – nearby and competing for potential employees. It’s also been criticized recently for being too dominant a force in Seattle. In addition to hiring tens of thousands of warehouse workers around the world each year, Amazon is beefing up its AWS and advertising sales forces, and there’s no particular reason why they need to sit in expensive Seattle office space. As such, hunting around for a lower-cost base with substantial financial incentives from the local government makes a ton of sense for practical as well as PR reasons. We’re going to see cities falling over themselves to win this business, which Amazon says will eventually provide 50,000 direct jobs and $5 billion in construction investment.
The challenge of running two headquarters will be a fairly unique one for a big tech company – others certainly have satellite offices, and big mergers sometimes result in dual headquarters arrangements, but this would be the first time that I’m aware of that a big tech company would deliberately choose to divide its HQ function between two locations in different stats. That’s going to create some unique challenges for managing the business, though Amazon’s highly balkanized management structure likely makes it a little easier. As with the recent acquisition of Whole Foods, this big process is going to be completed remarkably quickly: responses to the RFP are due by October 19th, and the announcement will be made next year, though the RFP talks about three distinct phases, with 500k square feet of office space required by 2019 and up to 8 million required “beyond 2027”, and mentions the “initial 15-17 years of the project”.
Update: two other things worth mentioning which have popped up since I published this: Amazon is also opening an R&D hub focused on machine learning in Barcelona, Spain; and Recode reports that there’s already political opposition to Amazon’s approach of seeking tax breaks for its new HQ.
Apple Announces $1.4bn Iowa Data Center Project (Aug 24, 2017)
Google announced its Jobs search vertical last month at its I/O developer conference, but it’s now actually launched the feature live for users (this is a good example of how launch announcements are often vague or completely silent on the point of timing, and it’s always worth checking that detail). The search feature works pretty much as you would imagine, for now at least merely aggregating search listings on existing big job search sites, though there’s no guarantee Google won’t eventually seek to disintermediate the legacy players and do more of the heavy lifting itself. After all, if users are already coming to Google for search results, why not encourage employers to list directly on Google over time? It’s also worth noting that Google has been reported to be working on a recruitment service for companies, for now decoupled from the Google search engine, but clearly a potential fit with it in time.
Google Launches Vertical Jobs Search Feature (May 17, 2017)
Facebook has one of the biggest global audiences – perhaps the biggest – of any technology company, and it seems constantly tempted to try to leverage that audience for more things, with the next on the list recruiting services a la LinkedIn. I’m hugely skeptical about this – it’s one thing to know that a potential employer might scour social media accounts, but quite another to serve up your personal account directly in the application. I just don’t think most applicants want their Facebook profile to be front and center in their job hunting. In addition, even in the unlikely event Facebook were to match LinkedIn’s scale in this business, that’s a half-billion-a-quarter business, or about a tenth of Facebook’s current revenues. In other words, this is unlikely to take off, and even if it does, it won’t make a huge difference to Facebook’s business.
via USA Today
Amazon to Create More Than 100,000 New Jobs across the U.S. over the Next 18 Months – Amazon press release (Jan 12, 2017)
This is just the latest in a series of announcements from major tech companies (not to mention car companies and others) about job creation in the US in the run-up to the inauguration of Donald Trump as US President in a week’s time. It’s worth putting the numbers in context a bit – 100k new jobs in the US in 18 months compares to around 135k new jobs created globally over the last 18 months. 180k US employees at the end of 2016 would be 57% of my estimate of 315k jobs globally, so 100k new US jobs suggests only a slightly higher run rate and ratio of US to global jobs to the past 18 months. As with a lot of the announcements we’ve seen lately, this seems mostly about highlighting existing job creation plans rather than some new direction.
Big Growth in Tiny Businesses – WSJ (Dec 28, 2016)
Online retail is creating opportunities for new kinds of businesses – very small ones, often with a single employee who’s also the owner, across all kinds of fields, including food, manufacturing, and chemicals (including soap and perfume).
Part of Uber’s PR push to counter the narrative that’s developed about its antipathy towards regulation is this kind of stuff, designed to showcase the positive impact Uber has on local economies. This Uber blog post cites a Boston Consulting Group study, and highlights the positive contribution made by Uber and other transportation platforms. Apple has successfully used a similar strategy – citing app developer jobs, for example – in arguing for its own positive economic impact.