I can't find it now, but years ago The Economist ran an article about a study that said a key factor in corporate headquarter moves was where the CEO lives. Disappointing to see it play out like that on such a grand scale, and after such a pretense of a nationwide search. Yet another thing that convinces me I'd never want to work at Amazon.
[1] https://www.businessinsider.com/jeff-bezos-owns-five-massive...
Somehow the office didn't land in Beverly Hills or the Texas ranch.
I expect the fact that he already has homes in NYC and DC is related to the fact they are in fact important locations for his business.
The office in NYC is going to be nothing more than a big satellite office compared to the huge HQ in Seattle, so it's not like he's actually moving Amazon's HQ and himself to NYC. In fact I doubt he'd spend that much time there. Given his duties, he'll probably be in Seattle most of the time.
Also, I very much doubt the office in DC is there because Bezos is just dying to spend more time in DC ;-)
If the guy really didn't like DC, I'm thinking he wouldn't have bought a $23m home there. As you say, he's rich enough he can do what he wants.
Sure, maybe he doesn't own property in Dallas, but it also seems like it's more of a place he'd like to spend time in over Austin, or Atlanta, or Pittsburgh, or a whole bunch of other cities.
The fact that Amazon was in late stage talks with Dallas also makes me think Dallas will be one of the cities to get "other major Amazon facilities as well" as this WSJ article mentions.
NYC is so obviously superior to every other location that you have to wonder whether there was any serious chance of anyone else actually getting the HQ2 at all? I mean, sure, DC can play both the government card, and the "Bezos loves us" card. But everyone else has no credible argument to put forth that would entice Amazon to abandon the opportunity that is NYC.
(In the end, even DC didn't have a good enough argument. After all, they still kept half the jobs in NYC.)
That's quite a difference. Even if Amazon gets tax breaks, its employees will not.
Dallas vs NYC is lowest vs highest income taxes in the nation.
If you had a global behemoth of a company, and you were already based on the West Coast, then your links to Asia would be just about as good as they could be without relocating out of the US.
But what if you wanted to go for a whole "sun never sets on the British Empire" thing? Then you would need better links from the Europe-Africa side of the world to your HQ. Assuming you don't want to relocate out of the US, that means the Eastern seaboard. That's just geography. Which place on the eastern seaboard has the best multi-modal transport links to the rest of the US and Europe-Africa? NYC. For logistics, by air, land, and sea, you can't beat NYC. They've just invested way too much into that stuff for anyone else to beat them at it. (Probably did so over time using those high taxes you talked about.)
Add in the fact that NYC has access to an enormous community of technology experts, and the fact that it has plentiful high powered jobs in other industries, and the choice really is a no-brainer.
Dallas, is just not there yet, to be perfectly frank. The only city in Texas that is even working towards being a rival to NYC is Houston. And while they've made admirable progress, with ports, metro trains, and airports, they've still got quite a ways to go. (For instance, they're metro is building out nicely, but it still doesn't connect to either of their airports yet. Nor does it connect to their port.)
Other cities can compete with the coastal elites, but we have to sober up as to what we need to do in order to actually be competitive. Lowering taxes might be part of it, but it's not going to make any of the knowledge behemoths leave the coastal elite cities.
Would you leave your home for another home in a neighborhood with worse schools and worse transport just because it was cheaper?
I was just pointing out that a place like Dallas does have some benefits over NYC.
I do think Dallas has so much potential though, and I think if you would look a little you would see the overwhelming number of similarities between Dallas and Seattle, both politically, economically, socially, and even traffic/transport-wise.
I just hoped, maybe naively, Amazon would want to move somewhere where it could harness that potential and help shape the city rather than merely rely on a city’s already established resources.
Dallas will continue growing without Amazon, just as Seattle would have, but I can’t say I’m not disappointed for my hometown.
NoVA is a little more perplexing? I think it may have been, as you said, DC is Bezos' home. And it's DC, so there's a lot of government type stuff there. I don't know? Maybe Bezos is the reason HQ2 was split into HQ2A and HQ2B? Because if you have NYC, I'm not sure why you need anyplace else?
Additionally, public sector sales is a huge part of the business, and you need people in DC/VA in order to make that happen.
I doubt building a full HQ2 in Nova is possible, but a 40,000/10,000 split between the two places makes a ton of sense.
Joel Spolsky also wrote about this 15 years ago:
> “My company, Fog Creek Software, is relocating. There’s nothing wrong with the brownstone we’re in, it’s just a tiringly long commute. Basically, we’re moving because of William Whyte‘s rule: virtually all corporate relocations involve a move to a location which is closer to the CEO’s home than the old location. Whyte discovered this principle after an extensive study of Fortune 500 companies that left New York City for the suburbs in the 1950s and 1960s. They always had big, complicated Relocation Committees which carefully studied all the options and chose, coincidentally I’m sure, to move to within half a mile of the CEO’s home in Danbury, Connecticut. Whyte also showed that these companies all tanked after the relocation. With, I believe, but one exception, companies that left New York City to be closer to the CEO’s house in Connecticut or Westchester had dismal stock performance compared to companies that stayed in Manhattan.”[2]
1-https://books.google.ca/books?id=_h4eF9H9UtQC&pg=PA93&dq=%22...
2- https://www.joelonsoftware.com/2003/03/28/finding-an-office-...
Not participating in the bid would have been suicide for the politicians of any major city save perhaps Kreuzberg, Berlin [1].
The amount of wealth creation and subsequent tax payments/land value boost that any FAANG company would bring with a new HQ is way too big to be ignored.
[1] https://www.theguardian.com/cities/2018/may/09/fuck-off-goog...
Wouldn't call it "massive" in NYC. The office size is projected to employ 25,000 people in total. Nice number, but not "massive" for a city of 8,623,000 people.
Not to mention the knock-on effects of the many jobs the HQ will indirectly create - cleaning, food prep, waste mgmt, facilities, security, transportation, etc.
But yes, I agree that NYC is probably the city with the highest bargaining power in the US due to its size and economic diversification. And yet they still submitted a bid, even while Mayor de Blasio was badmouthing the company [1]
It will be interesting to see what the incentive package was - that's when we'll know just how much Amazon profited from the whole bid/selection process.
[1] https://www.businessinsider.com/bill-de-blasio-amazon-hq2-de...
This isn't just an office for software developers so that's not likely to be true.
This is completely detached from reality.
Amazon is fighting for top talent against other FAANGs and all other employers. If you can't also get an offer from the likes of Apple and Google, or at least other decent employers, Amazon doesn't really want you.
If you can get offers from good employers in good locations, let along from Google and Facebook, you're not moving to Mobile Alabama for no Amazon job. Certainly not if you're a young single guy.
Amazon wouldn't invest billions of dollars in this new office, compared to a few millions in Mobile, for no good reason. You may not like it, or Amazon generally, but they are known to do their homework.
NYC isn't known for small salaries, partly because it's not easy to live in Manhattan on a small salary.
A major industry in Manhattan is banking, and folks in investment banks pull salaries that easily rival engineers, even fresh out of school.
In fact that's a big reason that tech stayed out of NYC for a long time. It used to be that even senior engineers made half of what a junior investment banker would get.
Not all among these 25k employees will be paid over $200k. Not even among engineers. Amazon doesn't pay that well, for a FAANG.
This isn't the Bay, where if you're not an engineer, you're a starving artist. More than anywhere else in the US, engineers who think of themselves as "handsomely paid" will be up for a rude awakening in Manhattan.
For the sake of argument, let's say 5,000 of the new employees will be making $200k+. That means that their effect will be less than 15,000 employees making about $80k each, which I bet is about average for Manhattan.
Not a ton of effect.
> And yet they still submitted a bid, even while Mayor de Blasio was badmouthing the company
It would be outrageous if they didn't. Even 100 well paying jobs should be enough for the mayor to try to court them. He's a public servant, and these jobs serve the public.
Moreover, this will help establish NYC as a tech hub, something it's been striving for for quite a while, generally without great success.
Finally, I bet the incentive package isn't as aggressive as others that were submitted. Amazon wants to be in NYC quite as much as NYC wants Amazon.
It's unreasonable to assume most of the employees in the new office are going to be SDE2. Likely most of them will be new hires and SDE1.
$200k total compensation is not competitive for an experienced senior software engineer in Manhattan. I bet one of the arguments against NYC was that Amazon would likely have to improve compensation packages.
They told me it's very rare for a new hire to come in as SDE3. Even a very experienced senior engineer is unlikely to get an offer above SDE2 level.
SDE3 is thus not just a senior engineer, but one who has been with Amazon for several years.
Per our discussion, that means very few of the new office employees are going to be above SDE2 level. The stated purpose of this office is to recruit new talent, which will be at SDE2 level at most.
Finally, "close to 300k" isn't very competitive for a senior NYC SWE who has been with the same company for years. I'm sure you know this is far below most other FAANGs for a similar position.
For example, a couple of my friends interviewed with Amazon fairly recently, for senior engineering positions. In every case when the same person received an offer from Amazon + another FAANG - the other FAANG offer was substantially higher.
In one case I know the exact numbers, and the other FAANG offer was 50% (!) higher.
> The difference in compensation between amazon and fb/google/netflix is minimal except for at the very junior levels.
This not only contradicts what I know from friends, it also makes little sense. Hiring top talent straight out of college is a huge priority for companies like Amazon, which is trying to build a strong talent base. Underpaying at the entry level means they'll lose all the best candidates.
Only paying competitively at more senior levels means they're counting on these people to suddenly relocate to Seattle after 5-6+ years at another FAANG, which would never happen. Especially as Amazon doesn't pay particularly well at the senior level too.
You want to tell me an L4-5 from Google will move to Seattle to work as an SDE3 for "almost $300k"? I.E. take a 50% paycut to work for a company with worse reputation in an area that has far fewer tech jobs than the Bay? Mid career?
Please.
It's pretty well known that if you get an offer from Amazon and also from Facebook or Google, you will accept Facebook or Google. This is true for all levels, and the numbers you are quoting only confirm this preference.
My impression is that Amazon has been having trouble competing for top talent, and is working to improve its propositions, with this big new office in NYC being part of the pitch. They do have ways to go before they can actually compete with the better FAANGs out there, to the point when people will routinely choose them over Facebook or Google or Apple.
I've worked at multiple fangs/unicorns, and any differences between these companies is largely marginal. Maybe amazon is worse now than I realized, and maybe other companies are better now than I realized, but overall, what ultimately matters more is that you're at a place that will allow you to keep getting promoted rather than any one company that pays more at any given level.
I find that pretty implausible. Foxconn didn't save Scott Walker (and I don't think that's because his would-be supporters later realized that it wasn't such a sweet deal, either).
And it was a Chinese company. Chinese.