Long planned by Google 80-acre campus in San Jose may be on hold, at least for now. CNBC sources say the Alphabet brand halted construction of its Downtown West facility after an initial phase of demolition. The company is said to have “eviscerated” the campus development team as part of its mass layoffs in Januaryand froze construction without telling contractors when it could resume.
In a statement to Engadget, a representative said the company wanted its office space to reflect the “future needs” of the company, hybrid workers and the community. Google is still determining “the best way to move forward” with the San Jose campus, but is “committed” to the long-term development of San Jose, the spokesperson adds.
Google spent years negotiator and design Downtown West, and received approval in 2021 after promising concessions including 15,000 Silicon Valley housing units, $200 million in community support (like helping displaced businesses), and dedicating more than half of the campus for public use. Construction was expected to begin in earnest later this year and take 10 to 30 years. Critics objected to the elimination or relocation of well-known businesses and landmarks, but the potential economic benefit to the city was such that Governor Gavin Newsom touted the deal as playing a major role in the recovery from the COVID-19 pandemic.
However, it was the pandemic that ultimately put Google in its current position. The company has been hiring aggressively in previous years (its ranks have risen 20% since 2017), but is laying off about 12,000 employees this year as potential ad and cloud services customers tighten their budgets. Google is also adopting a hybrid working strategy which allows staff to stay home part of the time. In other words, there is not as much need for offices as before.
That doesn’t mean Downtown West is dead. The potentially decades-long timeline for the project gives Google some flexibility. However, the uncertainty leaves San Jose in a delicate state. Google has cleared a large area, but is not building the campus that is expected to bring jobs and economic activity to the area.