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Google has paused the construction of a new 80-acre campus in San Jose, California, 9to5google (via CNBC) reports.
Back in 2021, Google got approvals to build a massive new campus in San Jose, dubbed “Downtown West.” This mega campus could have 7.3 million square feet of office space and is valued at $19 billion. The construction was also initially planned to start in 2023. However, the company decided to pause the project due to economic concerns.
In mid-January 2023, Google announced plans to lay off at least 12,000 employees, which equals 6% of its staff. The cost-cutting campaign is now affecting the company’s headquarters. According to the people familiar with the matter, the company has yet no plan to restart the construction. Google also removed the construction updates from its website.
Given that the first demolition phase is also completed, delaying the project might put the site “at risk of becoming a long-term eyesore and economic zero.”
Google to halt building a new office campus in San Jose, California
Despite the optimism for the resumption of Google’s San Jose campus, the project may not reach the scale promised in the original master plan. The initial project was supposed to have retail spaces, restaurants, and houses for Google employees. The company started noticing contractors late last year that it might change the new campus plans.
A Google spokesperson said the company is ensuring that its real estate investments “match the future needs of our hybrid workforce, our business, and our communities.” Additionally, Google says it still remains committed to the developments in San Jose while assessing the best ways to move forward with the Downtown West campus.
Besides the economic slowdown, fierce competition in the search business has put Google in a critical situation. The search giant is now facing threats from ChatGPT, Microsoft Bing, and soon Elon Musk’s so-called TruthGPT.
Google has been known to be the dominant power of search for decades, but its reign is now in danger by an AI chatbot. That’s why the company is now joining forces to battle ChatGPT by forming a unified team called Google DeepMind.