Google’s ambitious plans for an 80-acre Downtown West campus in San Jose, California, are in jeopardy due to the company’s recent downsizing efforts. The tech giant’s plans for the ‘mega-campus’ was approved in June 2021. The development costs were expected to be an estimated $19 billion. The investment included the building of thousands of new housing units and 15 acres of public parks.
However, the project’s future now appears uncertain, with construction on hold and no clear plan to resume. As part of its cost-cutting measures, Google reportedly gutted its development team for the San Jose campus. In addition, the company signalled to contractors late last year that the project could face delays and changes. The lead developer for the project, LendLease, laid off 67 employees, including several community engagement managers, in February. Meanwhile, Google removed construction updates from its website for the project.
Cost-cutting
Despite sources expressing optimism that a campus will be built at some point, concerns remain that the project may not reach the scale promised in the original master plan. The company’s severe cost-cutting measures included eliminating 12,000 jobs, or about 6% of its workforce, to address slowing sales growth. This move may have contributed to the project’s current state. Google’s $10 billion investment in at least 20 essential real estate projects in 2022 was intended to fund the San Jose project and others. However, the tech industry’s struggle to adapt to a post-Covid world that appears to be more hybrid and less centred around large campuses has further complicated matters.
Community
Google spent years planning for the San Jose complex and winning over the local community. To get the community on its side, Google designated more than half of its campus for public use. Additionally, the tech giant offered a $200 million community benefits package.
However, the project’s demolition phase took out several historic San Jose landmarks and forced the relocation of others, creating controversy among some residents. While Google has stated that it remains “committed to San Jose for the long term and believe[s] in the importance of the development,” the fate of the Downtown West campus remains uncertain.
San Jose councilmember Omar Torres, who represents the downtown area, expressed concern about the delay, saying, “it’s definitely concerning that a lot of the money is coming when the cranes are in the air.”
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