Amazon.com Inc. reported on April 20, 2026, that it has missed its annual job creation targets for its second headquarters (HQ2) in Arlington, Virginia, for the third year in a row. According to the annual compliance report submitted to the Virginia Economic Development Partnership (VEDP), the company added 1,450 qualifying jobs in 2025, significantly below the 3,500-job threshold required to remain on the original incentive schedule. This shortfall brings the total number of HQ2 employees to approximately 11,200, trailing the cumulative goal of 14,000 positions by this stage of the project.
The 2018 agreement between Amazon and the Commonwealth of Virginia outlined a plan to create 25,000 jobs by 2030 in exchange for up to $750 million in performance-based incentives. Under the terms of the Major Employment and Investment (MEI) Project Performance Grant, Amazon receives roughly $22,000 for each new job created that meets specific salary requirements. Because the incentives are structured as post-performance payments, the state will not disburse the scheduled $28 million grant for the 2025 calendar year. This follows similar misses in 2023 and 2024, during which the company also failed to trigger the full incentive payouts.
Amazon’s Vice President of Worldwide Economic Development, Holly Sullivan, stated that the company remains committed to its long-term presence in Northern Virginia despite the hiring slowdown. Sullivan attributed the lower-than-expected figures to a broader shift in the technology sector’s labor needs and the continued integration of hybrid work models. While the first phase of the campus, Metropolitan Park, is fully operational with two 22-story towers, the second phase, known as PenPlace, remains in a state of indefinite pause. Construction on the three planned office towers and the signature Helix structure was halted in early 2023 and has not yet resumed.
Virginia officials emphasized that the state’s financial exposure is limited by the structure of the deal. Secretary of Commerce and Trade Caren Merrick noted that the pay-for-performance model ensures taxpayer funds are only utilized when specific economic milestones are achieved. The report also detailed that the average salary for the existing 11,200 employees at HQ2 exceeds $155,000, which remains above the minimum threshold required by the state. However, the slower pace of hiring has impacted local ancillary projections, including anticipated tax revenue for Arlington County and the timeline for surrounding infrastructure improvements.
Despite the current shortfall, the agreement allows Amazon to catch up in future years. If the company accelerates hiring and reaches the 25,000-job mark by the 2030 deadline, it could still claim the full $750 million in state grants. The VEDP report confirmed that Amazon has invested over $2.5 billion in capital expenditures in Arlington to date, primarily through the completion of the Metropolitan Park phase. The next compliance review is scheduled for April 2027, which will assess the company's performance throughout the 2026 fiscal year.