Amazon announced Thursday it intends to delay reopening its offices until Jan. 3, a move that raises fresh questions about the pace of recovery in Seattle and Bellevue where well-paid workers from Amazon and other tech firms are critical economic drivers.

Amazon workers were originally slated to head back to offices the week of Sept. 7. But in a Thursday memo to employees, Amazon human resources chief Beth Galetti said the Seattle-based retailer had pushed that date back four months and that it continues to “closely watch conditions related to COVID-19.”

The delay wasn’t entirely unexpected, given an uptick in coronavirus hospitalizations caused by the infectious delta variant that has prompted corporate peers such as Microsoft to push back their own return-to-office plans.

But the move prompted new anxieties for business owners in Denny Triangle and South Lake Union. Many were banking on the return of Amazon workers and now worry about making it through the next five precarious months — especially if Amazon’s decision spurs other downtown employers to rethink their own return plans.

“A lot of my employees were looking to come back to work and now I have to tell them ‘no’,” said Cajeton Mendonca, who had hoped to return his three Saffron Spice food trucks to Seattle in time for Amazon’s late summer reopening.

Amazon’s decision to delay reopening “leaves retailers and service providers in the central core … in a holding pattern,” said Margaret O’Mara, an author and history professor at the University of Washington and an expert on the role of the tech sector in urban development.

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The decision also highlighted internal tensions between Amazon’s office culture and its warehouse workers, who say they’re still expected to show up to work, where many of their colleagues are testing positive for the virus, without inducements like hazard pay. And unlike some other big employers, such as Microsoft, Amazon isn’t requiring its workers to get vaccinated.

“It feels frustrating that they would protect their corporate workers [as] opposed to continually supporting warehouse associates,” said a truck unloader at an Amazon facility in Arizona, who asked not to be named because he was not authorized to speak with the media.

Like many employers, Amazon has altered its return-to-office plans several times, in response both to employee sentiment and changing coronavirus realities.

The company sparked employee backlash earlier this year when it announced it planned a “return to an office-centric culture” by autumn, which some workers interpreted as an expectation that they would be in the office full-time. Nearly 92% of Amazon employees wanted to continue working remotely at least some days of the week, according to an internal 2020 sentiment survey seen by The Seattle Times.

Amazon relaxed its stance later this spring, saying that once offices reopened, employees would only be expected to work in-person three days a week.

“This has been such an unusual time for all of us,” an internal Amazon blog post announcing the latest delay read.

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Amazon’s postponement affects roughly 60,000 people working in the company’s offices in Seattle and Bellevue, as well as tens of thousands more corporate Amazon employees worldwide.

But the vast majority of Amazon’s 1.2 million-person global workforce is still expected to show up for work at Amazon warehouses, where the company has rolled back coronavirus precautions in recent months. Meanwhile, warehouse workers say they continue to receive notifications that their co-workers are testing positive for the disease.

Mixed attitudes toward the vaccine among warehouse workers have contributed to Amazon’s reluctance to issue a companywide vaccine mandate, Bloomberg reported this week. The company is worried that if it required vaccination as a condition of employment, enough warehouse workers would quit to leave gaping holes in Amazon’s logistics networks.

And Amazon is sensitive to the criticism that it has treated its office workers more gently than its hourly workforce during the pandemic, making the company loathe to set different vaccination standards for office versus warehouse employees.

Some employers, including Walmart and Tyson Foods, have taken a split approach, mandating vaccines for office workers and managers but not for front-line staff.

Microsoft this week became the latest tech giant to say workers would need to be vaccinated if they want to work in the office; Google and Facebook, which together employ more than 10,000 people in the Puget Sound region, made vaccines mandatory for office workers last month.

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Amazon continues to encourage employees to receive the vaccine, but will not require it, spokesperson Jose Negrete confirmed.

In response to a question about whether Amazon’s relatively late return-to-office plans were related to its decision not to require vaccines, Negrete said the company’s “focus through the pandemic has been the health and safety of our employees, and we’ve been making decisions with that in mind.” He did not respond to a question about why the company is not mandating vaccinations for workers.

Whatever the reasons behind Amazon’s decision to delay reopening, it has made life more difficult for many small businesses downtown that had been counting on those workers’ return to their offices by the fall.

“We’re afraid obviously everybody else will follow suit because Amazon tends to be the leader,” said Kristin Watson, operations manager at the Cactus restaurant at the heart of the Amazon campus in South Lake Union. 

Downtown business leaders stressed that most employers were already reviewing their return-to-work strategies because of rising case counts and intensifying concerns over the delta variant. 

“I think every employer is having to wrestle with their plans, given this fifth wave [of COVID cases] and the uncertainty around it,” said Jon Scholes, president and CEO of the Downtown Seattle Association (DSA). The region was still positioned for a solid recovery, based on high vaccination rates, Scholes said, but he conceded that “it may be a little while longer than anybody would have liked before [office workers] come back.” 

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Across Lake Washington, Bellevue business leaders also acknowledged the huge role that Amazon and other tech employers play.

“Microsoft and Amazon are our top two employers in downtown,” said Patrick Bannon, president of the Bellevue Downtown Association. “We’d love to welcome everyone back ASAP but also realize they’re prioritizing health and safety for a global workforce.”

The delay certainly adds a new hurdle for what appears to be a slow comeback of downtown Seattle’s office market. Commercial real estate observers were expecting a short-term delay in the return to office because of the latest coronavirus case surge. But the length of Amazon’s latest delay, coupled with the scale of its office footprint in downtown Seattle, complicates projections.

Together, Amazon and Microsoft occupy more than 20 million square feet of office space from Seattle to Redmond. Those tech titans’ decision to delay reopening means “it’s going to take longer to get to that pre-COVID point than we hoped,” said Rod Kauffman, president of the Building Owners and Managers Association Seattle King County.

Business leaders and employers were quick to note that any negative effects of the Amazon decision would be at least partly countered by the stronger-than-expected turnaround in downtown economic activity, particularly in the tourism and hospitality sectors. 

As of July 25, the number of downtown Seattle visitors was 86% of the level from the same week in 2019, according to data gathered and posted by the DSA. That’s up from 65% two months ago. Hotel occupancy has also surged and is now at 75% of its 2019 levels, compared to 50% as of May 30.

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Bannon said downtown Bellevue was also seeing “an uptick in weekday foot traffic.”

But only about 25% of downtown Seattle office workers have returned to their offices — a figure that seems to confirm broader concerns about the downtown recovery. According to Placer.ai cellphone data published by DSA, around 40,000 office employees are regularly working downtown, compared with about 170,000 before the pandemic.

That mixed picture was reflected by activity in downtown Seattle as news of Amazon’s delay made the rounds Thursday.

Parts of downtown were teeming with pedestrians. At the Amazon campus in South Lake Union, the sidewalks were full of office workers, many of them wearing Amazon badges, and restaurants and food trucks seemed busy. Amazon has been allowing employees who prefer to work in the office to do so since early this year.

Surrounded by Amazon office buildings, food truck manager Robert Kidd helps two Amazon employees with a lunch order Thursday in Seattle’s South Lake Union neighborhood. Amazon announced it is are pushing back a return to the office for workers. Kidd wasn’t happy to hear the news. (Ken Lambert / The Seattle Times)

Across the street from Amazon’s Houdini office tower at the Yumbit2 food truck, for example, business has picked up in recent months to the point where “we’re getting by,” said manager Robert Kidd as he worked through a line of perhaps eight customers. 

But he and other merchants also said current crowds are just a fraction of their pre-pandemic size. Before COVID, “I’d have a line all the way down to, like, where that crosswalk is,” Kidd said, indicating a spot more than 100 feet away.

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The Amazon news should bolster calls for additional federal relief for workers and businesses that are at risk if the current wave of COVID cases keeps offices empty, said Seattle restaurateur Ethan Stowell, who owns four downtown eateries.

Commercial real estate brokers and tech industry observers have remained bullish, pointing to Amazon’s physical expansion in Bellevue, where it has signed leases for 2 million square feet of under-construction space. Those commitments, brokers say, signal that in the long term Amazon is betting on a return to in-person office work.

“I’m in our office in Bellevue looking at two projects Amazon is building … They’re not building these for people to work from home,” said Kidder Mathews president and COO Brian Hatcher. “Delaying it four months is such a short landscape in the future. We’ve been doing this now for 18 months.”

Amazon’s record-setting growth — in profits and hiring — during the pandemic also spell an eventual strong recovery, O’Mara said.

“The area that is now Amazonia spent close to a century waiting to be developed into a full-fledged business district,” O’Mara said. “Now it may have to wait a little longer, but given Amazon’s extraordinary growth trajectory it seems that recovery, and more, is sure to come.”