Never mind Manhattan exodus, Big Tech is moving in

New York

FACEBOOK has just leased enough new office space in Manhattan to nearly triple its current local workforce, including at one of the city's most iconic buildings, the 107-year-old former main post office complex near Pennsylvania Station.

Apple, which set up its first office in New York a decade ago, is expanding to another building in Manhattan. And Google and Amazon are stitching together corporate campuses in the city more quickly than anywhere else in the world. Amazon paid roughly US$1 billion in March for the iconic Lord & Taylor building on Fifth Avenue.

Despite a pandemic that has ravaged New York, hollowed out many of its office buildings and raised fundamental questions about its future, the four companies collectively known as Big Tech are all significantly expanding their footprint in the city, giving it a badly needed vote of confidence. With fears that the virus could spike again in the colder months, many companies are grappling with how, when and even if office workers will come back to buildings in Manhattan. And the tech giants have not brought their workers back yet, either.

Even so, the giants have not only moved forward with previous growth plans, but have also increased their pace of hiring and office acquisition during the pandemic.

The industry's embrace of New York City comes despite the tumultuous reception that Amazon received last year when it proposed building a sprawling headquarters in Queens. Amazon abandoned the plans in the face of political and community opposition, but now has acquired more than two million square feet (sq ft) of office space for corporate workers, as well as warehouses from Staten Island to Queens to the Bronx.

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After Amazon bought the Lord & Taylor building, it announced in August that 2,000 employees would eventually work there, increasing by half its current tech workforce of 4,000. Amazon now has eight office properties in New York, most of which are clustered in Midtown. The company recently expanded outside Manhattan, leasing space on the Brooklyn waterfront for its Amazon Music team.

"We know that talent attracts talent, and we believe that the creative energy of cities like New York will continue to attract diverse professionals from around the world," said Ardine Williams, Amazon's vice-president of workforce development.

Even with Big Tech's expansion, the city continues to face a fundamental challenge: Most offices have been deserted since March, devastating the local economy and the ecosystem of transit, stores, restaurants and other businesses that depend on workers. Only about 12 per cent of workers have returned to Manhattan offices managed by CBRE, a commercial real estate firm that manages 20 million sq ft of office space in the city.

Many people do not want to go back to offices until there is a vaccine. Even after that, there are mounting questions about whether the pandemic has fundamentally tarnished the allure of the office towers of Midtown and Lower Manhattan. What's more, a recent uptick in new cases in parts of Brooklyn and Queens has raised fears that a second wave looms and that restrictions on daily life could be reimposed.

Collectively, Amazon, Google, Facebook and Apple have hired more than 2,600 employees in the city so far this year, bringing their total employment to over 22,000 people. Facebook alone has added 1,100 workers to bring its current workforce up to 4,000.

Apple, Amazon and Facebook have gobbled up more than 1.6 million sq ft of office space since the start of the year, most of which was leased or bought during the pandemic. Before the pandemic, Google added about 1.7 million sq ft of office space as part of a corporate campus rising along the Hudson River in Manhattan. The companies now have enough new office space to hire 15,000 more employees.

When those workers will arrive at the new offices remains uncertain; all four companies have allowed their employees to work remotely and some, including Facebook, foresee a future in which up to half its employees work from home. Executives at the companies said their investments even during one of the city's darkest periods reflect their belief that the features setting New York apart - its diversity, culture, regional transportation network and numerous colleges and universities - will keep luring people after the pandemic.

The companies are also wagering that current and future employees will be eager to return to shared workplaces that promote spontaneity and collaboration. "The big takeaway here is that New York will always be a tech hub," said William Floyd, director of external affairs for Google's New York offices, which has about 9,000 workers, more than half of whom are engineers. Google is on target to employ 14,000 people in the city in the coming years, fulfilling a 2018 pledge to double its New York City workforce.

The company has pieced together a sizable corporate campus in and around the Chelsea neighborhood in Manhattan, including several properties that are under construction.

For every Big Tech company in the city, there are numerous smaller but still sizeable firms, including Salesforce, LinkedIn, Spotify and ZocDoc. Microsoft, another tech giant, has a modest presence in offices near Times Square.

Before the pandemic, the city's tech sector employed 150,100 people, and had added a total of 15,700 jobs in 2018 and 2019, according to the New York state comptroller's office. Most of the new jobs were in fields like software, data processing and Internet publishing. The pace of hiring is expected to keep climbing. NYTIMES