Google’s long-planned 80-acre San Jose campus may be on hold, at least for now. CNBC sources say the Alphabet brand halted construction on its Downtown West facility after an initial phase of demolition. The company reportedly “gutted” the campus development team as part of its large-scale layoffs in January and froze construction without informing contractors when it could resume.
In a statement to Engadget, a representative says the company wants its office space to reflect the “future needs” of the company, hybrid workers, and the community. Google is still determining “how best to move forward” with the San Jose campus, but is “committed” to long-term development in San Jose, the spokesperson adds.
Google spent years negotiating and designing Downtown West, and received approval in 2021 after pledging grants that include 15,000 housing units in Silicon Valley, $200 million in community support (such as helping displaced businesses), and dedicating more than half of the campus to public uses. Construction was supposed to start in earnest later this year and take 10 to 30 years. Critics opposed the removal or relocation of known businesses and landmarks, but the potential economic benefit to the city was such that Governor Gavin Newsom touted the deal as playing an important role in recovering from the COVID-19 pandemic. .
However, it is the pandemic that finally put Google in its current position. The company has hired aggressively in previous years (its ranks have grown 20 percent since 2017), but it is laying off around 12,000 employees this year as prospective advertising and cloud service clients tighten their budgets. Google is also adopting a hybrid work strategy that allows staff to stay home part of the time. In short, there is not as much need for offices as before.
This does not mean that Downtown West is dead. The potentially decades-long time frame for the project gives Google some flexibility. However, the uncertainty leaves San Jose in an uneasy state. Google has cleared a large area, but it is not building the campus that is supposed to bring jobs and economic activity to the region.