Companies
Amazon India moving headquarters in Bengaluru to save costs
Summary
- According to two company executives, Amazon's new office in Sattva, a 15-minute drive from the airport on the city's outskirts, is expected to cost less than a third of the nearly ₹250 per sq. ft. of rent the company currently pays.
Bengaluru: Amazon India is moving its corporate headquarters from its longtime base in the northwest part of Bengaluru to close to the city's airport as part of the e-commerce and cloud computing giant's cost-cutting exercise, a development that has disturbed the idyllic setting of the bohemian residential community.
Significantly, Amazon India's plan to move out of the World Trade Centre, where it occupies nearly half a million square feet of office space across eighteen of the thirty-floor building owned by Brigade Enterprises Ltd, raises questions about how the publicly-traded real estate developer would find a new tenant and on the rental income of adjoining flats.
According to two company executives, Amazon's new office in Sattva, a 15-minute drive from the airport on the city's outskirts, is expected to cost less than a third of the nearly ₹250 per sq. ft. of rent the company currently pays.
The relocation is expected to start in April next year and be completed by April 2026.
A spokesperson for Amazon confirmed the development.
"At Amazon, we continually evaluate options which are conducive to our business strategy and take actions to bring the best value for our employees and customers. We are excited for our upcoming move to a new campus, a state-of-the-art facility designed to foster enhanced collaboration and deliver an unparalleled employee experience," said a spokesperson for the company, declining to share details.
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Brigade said that Amazon has not ended its lease agreement with the company.
"Amazon could've signed up additional space at a development on the Bellary Road (Airport Road), but there is certainly no ending of our agreement with them in World Trade Centre, Bangalore or our engagement with Amazon otherwise," said a spokesperson for Brigade.
Nestled in the city's first integrated complex, Brigade Gateway, Amazon's current office is housed in a 40-acre complex with over 1,200 residential flats, a shopping complex, a five-star hotel, a hospital, and a school. The residential complex has a club, a jogging track, and other sporting facilities for the residents.
These services encouraged many of the 5,000 Amazon employees at its WTC office to live nearby. According to the two executives, Amazon's employees occupy a fourth of the complex's flats.
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Unhappy employees
Many of the 300 Amazon employees are unhappy with the new office, which is about 20 kilometres away.
"None of us are happy," said an executive who has been with Amazon for six years. "This was an abode - a safe and quiet neighbourhood, schools for our children, a mall and dining out places. We'll have to look at another house close to the office, as driving from here is ruled out."
Driving through the country's most heavily gridlocked city to its new office could take more than 80 minutes during the daytime.
Amazon's planned relocation to a building owned by Sattva, owned by Salarpuria group, the Kolkata-based privately-held real estate developer, illustrates Big Tech firms' challenges and highlights the city's new growth. Until 2019, a booming global economy and near-zero interest rates allowed companies to focus on growth and hire tens of thousands. However, since 2022, as pandemic-induced lockdowns lifted and people started coming back to work, the use of tech products reduced. Consequently, companies began cutting excessive flab: Amazon, Microsoft, Google, Meta and Apple have cut over 110,000 jobs from their peaks in 2021 and 2022, according to an analysis by Mint.
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The city's airport corridor has emerged as the new growth driver, with Boeing, Infosys and Foxconn buying land parcels. The airport, about 36 kilometres from the city, is not connected to the metro rail, although that could change in the coming years.
The other fallout is the impact on rentals commanded by the residential flats. Unlike the city's new tech hubs in Whitefield, which are in the eastern suburbs or the southeast Sarjapur area, the northwestern region of Malleswaram has fewer offices. This could make it challenging for Brigade Group to fill up its soon-to-be-vacant office space in WTC, eventually leading to less demand for the flats in the area.
Priyamvada C in Bengaluru contributed to this story
