Where Will Amazon Build their NEW Headquarters? (expense, metro)
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Actually tech companies do almost exactly that. They will hire the best and brightest at high initial salaries, then work them hard knowing they won't stay around that long to accumulate big salaries from raises. Attrition takes care of most of it. Some will move around and do it a few times -- which is also just fine by these companies. Less training required. Amazon, Google, Facebook, etc. When you've worked for one before you usually fit right in at the other.
It's not a bad gig, they are good jobs, but it's not like it used to be. Perhaps IBM and Apple are a bit more traditional.
I'm in the business. This is true. Also, tech workers will leave at the drop of a hat, it's almost expected. Some will start the salaries low though. They hire those w/o experience but with a lot of brain power. It's a cycle.
Amazon is. They have a stack of applicants willing to work there just for the experience. Certain departments used to have a mandatory 20% attrition rate.
Look, you're a great poster, but you gotta get over this NYC thing. It's NYC.
I am aware of NYC’s allure. I’m also aware of the COL for people who live there. And that doesn’t include the expense it would take to purchase real estate and develop it into a complex big enough to accommodate 50,000 employees.
It’s about business, and Amazon is expanding beyond tech. I retired from a global Fortune 10 company, finishing up in HR. I don’t know everything, but I do have a bit of an insider view.
Since we are both speculating, I’ll leave it at that.
I am aware of NYC’s allure. I’m also aware of the COL for people who live there. And that doesn’t include the expense it would take to purchase real estate and develop it into a complex big enough to accommodate 50,000 employees.
It’s about business, and Amazon is expanding beyond tech. I retired from a global Fortune 10 company, finishing up in HR. I don’t know everything, but I do have a bit of an insider view.
Since we are both speculating, I’ll leave it at that.
And THIS is why Amazon won't pick NYC, not inability to recruit talent.
Location: Watching half my country turn into Gilead
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Quote:
Originally Posted by gladhands
The real estate is the issue, not the payroll.
I actually think NYC is one of the few cities that the real estate is not the issue, as it has plenty of existing infrastructure and sites tailor-made for renovation/construction. Amazon just recently announced that it's expanding its footprint by moving into two floors (360,00 sq feet) of a skyscraper, while also opening a new fulfillment center in Staten Island (855,000 sq ft). It's the real estate price that is the issue, but the State has offered $20 million in tax credits for expansion. Still pricier than some other cities, but Amazon setting up in NYC would be like KD joining the Warriors--an unpopular move from the rest of the league that ultimately brings the most success.
Salaries are definitely going to be a large concern. Even if Amazon only had half of their top estimate of 50,000 employees in NYC, if they had to pay an avg of 30K extra per employee-- it would be $750 million each year they'd be losing.
How are people arguing that salaries/COL are not a serious consideration? Payroll costs with the assumption of at least 30 years of operation at a chosen location can dramatically affect finances for Amazon. Amazon has a ton of R&D and entrepreneurial arms that are and will be funded. Money not spent on unnecessarily high salaries for the average employee will be used to invest. Payroll costs are HUGE....
Quote:
Amazon Technology and Content costs during 2016 were $16.1 billion. Technology costs consist principally of research and development activities including payroll and related expenses for employees involved in application, production, maintenance, operation, and platform development for new and existing products and services, as well as AWS and other technology infrastructure expenses. Content costs consist principally of payroll and related expenses for employees involved in category expansion, editorial content, buying, and merchandising selection.
Amazon General and Administrative expenses during 2016 were $2.4 billion. General and administrative expenses primarily consist of payroll and related expenses; facilities and equipment, such as depreciation expense and rent; professional fees and litigation costs; and other general corporate costs for corporate functions, including accounting, finance, tax, legal, and human resources, among others.
When one is talking about CoL , Toronto is not near as expensive as one might think.
Real estate is more expensive than most US cities but it's rentals are not. At $1750/month for a average one bedroom that is $500/month less than NYC, $400/month less than Wash, $300 less than Boston, $100 less than Pittsburgh, and only $75 more than Chicago.
This combined with far superior and free medical, excellent inner city public schools where VERY few send their kids to private, and much lower university/college tuitions, Toronto is cheaper than most comparably sized US cities. While gas, liquor, and sales taxes are higher, Hydro and municiple taxes are lower and Canadians enjoy many free or heavily subsidized medical/social/educational services.
How are people arguing that salaries/COL are not a serious consideration? Payroll costs with the assumption of at least 30 years of operation at a chosen location can dramatically affect finances for Amazon. Amazon has a ton of R&D and entrepreneurial arms that are and will be funded. Money not spent on unnecessarily high salaries for the average employee will be used to invest. Payroll costs are HUGE....
To be clear: I don’t think that Amazon is going to choose a city with a high cost-of-living. I think this has mostly to do with real estate costs. Cost-of-living is a very important factor when it comes to recruiting, but that really doesn’t come to play in New York or the bay area. People want to live and work in those places and or willing to take the quality of life hit. This may not be true of Boston, DC or other expenseive metros.
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