Tech giant Google has paused building a mega campus in San Jose, California, after construction began, sources close to the company confirmed to CNBC on Friday.
According to the company, the project was slated to span 80 acres and bring 4,000 living units and 25,000 jobs to the South Bay area over a 10-year construction plan.
“We’re working to ensure our real estate investments match the future needs of our hybrid workforce, our business, and our communities. While we’re assessing how to best move forward with Downtown West, we’re still committed to San José for the long term and believe in the importance of the development,” a Google spokesperson told CNBC in an email statement.
The Epoch Times reached out to Google for comments but did not hear back before this article was published.
The Google logo is pictured atop an office building in Irvine, Calif., on Aug. 7, 2017. (Mike Blake/Reuters)
According to the package details, San Jose approved Google’s project as part of a $200 million benefits package, planned to provide housing for thousands of families, 15 acres of public parks, and more.
In January, Google announced that it was laying off 6 percent of its workforce, which is 12,000 workers. CEO Sundar Pichai said the layoffs came after a “rigorous review” of Google’s operations.
“The fact that these changes will impact the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that led us here. Over the past two years, we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today,” Pichai said in the announcement.
Google has no current plan to restore construction in the foreseeable future as it trims its costs.
“We’re assessing how to best move forward with Downtown West,” Sheela Jivan, Google’s Downtown West Development Director, said in an email statement to Mercury News.
The tech industry has struggled to adapt to a more hybrid model and be less centered around large campuses post-COVID. Google says it is doing its best to manage the changing business landscape.
“We’re working to ensure our real estate investments match the future needs of our hybrid workforce, our business, and our communities,” a Google spokesperson said in an emailed statement to CNBC. “While we’re assessing how to best move forward with Downtown West, we’re still committed to San Jose for the long term and believe in the importance of the development.”
Google has adapted well to a hybrid work strategy that lets staff work from home and not report to the office, which means less office space is needed for the operations.
Google also promised to build 15,000 residential units in Silicon Valley, with 25 percent of them considered “affordable,” a critical issue in an area with one of the highest homeless populations in the country, according to government statistics (pdf).
San Jose councilmember Omar Torres, who represents the downtown area, expected the building process to take some time due to the financial strain.
“We all originally knew that it’s going to be a long-term plan,” Torres told San Jose Spotlight in February. “But yes, it’s definitely concerning that a lot of the money is coming when the cranes are in the air.”
San Jose Councilmember Dev Davis said she was not surprised by Google’s announcement but is optimistic the Downtown West project will resume in the near future.
“We always knew that there was uncertainty about the community benefits and that the community benefits were in large part tied to the actual project,” Davis told San José Spotlight. “The great thing is that we know that Google is committed to San Jose, and they fronted community benefits to us, and we have dollars in hand that we are able to use.”
Elizabeth is a SoCal based reporter covering issues in Los Angeles and throughout the state for The Epoch Times. She is passionate about creating truthful and accurate stories for readers to connect with. When she’s not reporting, she enjoys writing poetry, playing basketball, embarking on new adventures and spending quality time with her family and friends.
