Google halts construction on its 80-acre San Jose campus with NO plans to restart in the 'near future' as company slashes costs by laying off workers and cutting perks

Google is halting construction on its planned 80-acre campus in San Jose

The company has already gutted its development team for the campus

Rising interest rates and fears of a recession have forced cuts at Alphabet

By STEPHEN M. LEPORE FOR DAILYMAIL.COM
PUBLISHED: 23 April 2023

Google is halting construction on its 80-acre campus in San Jose with no plans to pick it up again in the 'near future,' as they begin a series of layoffs and cost cutting measures.

The Google village, named Downtown West, would have included shops, restaurants, a hotel, and cultural and entertainment hubs, as well as potentially acting as the campus for 25,000 Google employees.

The company gutted its development team for the campus - which they said would have an economic impact of $19billion - earlier this year in a series of downsizing efforts as the economy gets worse for big tech.

Rising interest rates and fears that the country is on the brink of a recession have forced the cuts.

The plan was to break ground on the site before 2023 ended but it was paused after worries of delays at the start of the year, with no plan to begin again.


Google is halting construction on its planned 80-acre campus in San Jose with no plans to pick it up again in the 'near future' as they begin a series of layoffs and cost cutting measures

San Jose councilmember Omar Torres, who represents the area, was concerned about the rumors.

'We all originally knew that it's going to be a long-term plan,' Torres said in February. 'But yes, it's definitely concerning that a lot of the money is coming when the cranes are in the air.'

CNBC reports that sources are 'optimistic' that the campus will eventually be built, although it may have to be scaled back.

LendLease, the project's lead developer, made 67 layoffs in February, including of community engagement managers.

In a statement, a LendLease spokesperson said they remain 'committed in the creation of thriving mixed-use communities in the Bay Area, including the Google developments,' and still has a 'significant team to aid in delivering these communities.'

In March, Google took construction updates on the campus off of its website.

Two months earlier, the company announced the cutting of 12,000 jobs, representing about 6 percent of its workforce in order to deal with slowing sales growth following record growth in its headcount.

Google's finance chief, Ruth Porat, penned a rare company-wide email explaining how the tech giant is introducing measures to cut employee services in an effort to reduce expenses.

The Google village, named Downtown West, would have included shops, restaurants, a hotel, and cultural and entertainment hubs, as well as potentially acting as the campus for 25,000 Google employees

The plan was to break ground on the site before 2023 ended but it was paused after worries of delays at the start of the year, with no plan to begin again

An artist's sketch of Google's Downtown West development in San Jose. The company submitted new plans in 2021

The company's goal for 2023 is to 'deliver durable savings through improved velocity and efficiency.'

Porat detailed how Google is cutting back on everything from fitness classes for its employees to office basics from staplers and tape while also reducing the frequency of laptop replacements for its workers.

Google submitted its initial application to the San Jose planning division on October 10, 2019.

'We embrace this vision not because it's Google's, but because it encompasses the aspirations for a vibrant, dynamic downtown that our community has long held, as generations of San Joseans have sought to create a regional destination reflective of our authentic, diverse character,' San Jose Mayor Sam Liccardo said back in 2021, according to Mercury News.

'Particularly amid all the challenges of this pandemic, I'm grateful for the persistent collaboration between Google and city staff to enable our community to benefit from thousands of jobs, affordable apartments, vibrant retail and restaurants, public plazas, and park space.'

The company submitted the more detailed plan in 2021 which showed its idea for the green spaces and parks in the area. At least 30 acres if the total 55 acres will be for homes and public spaces, according to the current plans



Google's detailed plan showing how the area would maintain 'core character'



The company has also planned for cultural and entertainment hubs on the development


The improved plans detailed the zoning for the development. A decision will not be made by the city until next year

'We're excited about this next step in our project, which incorporates feedback from thousands of people over the last two years and provides another opportunity for community input,' added Alexa Arena, Google's development director for San Jose, at the time of the plan unveiling nearly two years ago.

The Downtown West area in San Jose was set to cover 80 acres, 55 of which can be developed. Of this, 30 acres would be for housing and public spaces.

Within the plan, Google agreed to work with the city to ensure that 25 percent - 4,000 - of the homes in the Diridon Station area will be affordable.

'We continue to hear that housing and preserving affordability is a priority for San Jose, and our proposal offers more affordable housing, job pathways and community spaces for San Joseans,' Arena said.

Google CEO Sundar Pichai

The development was also asked to blend into the surrounding neighborhoods instead of acting as a stand-alone tech campus.

'Downtown West is designed to be a true part of the city, the opposite of a traditional corporate campus,' said Laura Crescimano, founder of SITELAB urban studio, the project's lead urban designer.

'The draft design standards and guidelines published today set out the roadmap for a resilient and connected Downtown West.'

And historical buildings and natural features in the area were also required to be incorporated into the plan.

'Our team worked with Google to draw on the uniqueness of the location to propose a place where urban life and nature can coexist,' Crescimano said.

'We've brought together new and historic buildings, opportunities for arts and culture, playful spaces, and moments of respite along the Creek.'

According to the draft environmental impact plan submitted in 2021, the project would not create any net additions in greenhouse gases.

The company said that the new buildings they develop will be nearly 100 percent electric and 65 percent of travel would involve mass transit, bicycling and walking.

The plan included the ability for Downtown West to generate 7.8 megawatts of on-site solar energy as well as feature its own local microgrid.

Google's plan was welcomed by city officials who say that the 'city-within-the-city' will be of enormous benefit to residents.

The estimated timeline for the project as of Wednesday. The final environmental impact report will be submitted by this winter and a decision could be made by summer 2021 if the review is not pushed back further because of the pandemic

'This is the next level of development for San Jose,' said Scott Knies in early 2021, executive director of the San Jose Downtown Association.

'You have the housing, the affordable housing, and certainly the offices are there. But you also have the extraordinary combination of open spaces and cultural uses that makes it really unique.

'This is like a city within the city,' Knies added. 'Downtown West will not be a forest of high buildings. It's darn impressive.'

'At a time when so much in our world is on pause due to COVID, it's heartening to know that San Jose's most significant long-term urban development project is on track and hitting a key milestone' with the filings, Deputy City Manager Kim Walesh said.

The project was not without its critics, however, as some locals fear that it will displace working families and communities of color amid the pandemic.

'The pandemic has made the biggest concerns from the community about this project — preventing displacement, adding affordable housing, and ensuring quality jobs for working families and communities of color — even more critical,' said Maria Noel Fernandez, campaign director with Silicon Valley Rising who are fighting again the plan.