Meta Platforms Inc. and Amazon.com are cutting back on their expansion plans.
According to people familiar with the matter, Meta decided not to take an additional 300,000 square feet of space at 770 Broadway, the building where it is currently located. The company is evaluating what to do with the space in Hudson Yards, as well as pausing plans to build more offices there, according to people who asked not to be named.
According to a person familiar with the matter, Amazon has reduced the amount of space it intended to lease at Hudson Yards. There is no deal yet.
The company is looking forward to opening the Farley Building near Pennsylvania Station and remains committed to New York.
Office utilization is one of the many reasons why we wouldn't proceed with a particular deal. New possibilities have arisen from the ways we connect and work. We are trying to make sure we make focused, balanced investments to support our priorities.
People for Amazon and JP Morgan wouldn't say anything.
Since the start of the Pandemic, many tech companies have moved toward more remote working options. Increasing concerns about the potential for the US economy to head into a recession have caused some companies to slow hiring. Some mid- to senior-level positions are going to be slowed or paused.
There are bad news coming from tech giants.
While both Meta and Amazon are still building out giant offices in Manhattan, the two companies' more cautious approach is a potential sign for future challenges across the city's office market. Despite a slight leasing rebound earlier this year, New York still has a lot of office space.
In the last few years, Meta has signed large leases at Hudson Yards and the redeveloped Farley Building. Even though most of its employees worked from home, the firm continued to build out its new offices and look for more space in anticipation of more growth.
The Lord & Taylor building in Midtown Manhattan was purchased by Amazon for $1 billion in 2020.
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