Amazon's HQ2 Near D.C. Widens Battle for Tech-Savvy Vets

U.S. military veterans employed by Amazon listen to CEO Jeff Bezos speak at a Veterans Day celebration.

U.S. military veterans employed by Amazon listen to CEO Jeff Bezos speak at a Veterans Day celebration.


Photo:

Leonard Ortiz/Digital First Media/Orange County Register/Getty Images

Amazon.com
Inc.’s


AMZN 1.62%

planned regional headquarters in the heart of the U.S. military establishment is creating a new potential battleground for veterans. This time, the fight is for them.

Amazon says it wants to hire 25,000 staff for its planned facility near Washington, D.C., over the next several years. That would be almost a sixth of the existing private-sector workforce for defense contractors and government IT specialists in the area.

Defense companies including

Lockheed Martin
Corp.

and Booz Allen Hamilton Holdings Corp. are already tackling a shortage of skilled tech workers in a tight labor market. Contractors working through a two-year uptick in Pentagon spending on projects including cybersecurity and cloud-computing capabilities say they worry Amazon’s arrival will exacerbate a local talent crunch.

“Amazon does put stress on the system,” said Mac Curtis, CEO of

Perspecta
Inc.

a government IT specialist with 14,000 staff that counts the Pentagon and the Central Intelligence Agency among its clients.

Amazon wouldn’t say what kind of workers it plans to hire and has yet to post any job listings for the office complex in the National Landing neighborhood of Arlington, Va. The company plans to add another 25,000 workers over the next decade in New York City, the site of its other new second headquarters, or “HQ2.” While less of a magnet for government work, those offices will also require software engineers and cloud experts.

Amazon already employs more than 18,000 U.S. veterans and their spouses, about 3% of its global workforce. The company has said it wants to increase this to 25,000 over the next three years. Last year, Amazon expanded a partnership with the Labor Department to train 1,000 veterans in cloud computing. Some who have completed the program are now working for Amazon Web Services.

“We’ve found members of the military community are a great fit at Amazon—bringing a bias for action and customer obsession that fit in well with our culture,” said Ardine Williams, the company’s vice president of Worldwide People Operations, and an Army veteran.

The web services unit is Amazon’s fastest growing, with sales up 48% annually in the nine months to Sept. 30. The company is pursuing more government contracts, including with the Pentagon. Many analysts view Amazon as the front-runner for a deal worth up to $10 billion to shift more Defense Department data to the cloud.

Some of the most prized new hires for defense contractors, and potentially for Amazon, are the roughly 250,000 people who leave active-duty military service each year, said companies and recruitment specialists. Big government-services companies such as Leidos Inc., which is remapping the Pentagon’s health care system, draw a third or more of their staff from people leaving the military.

“Veterans are clearly going to be a target,” said John Barney, a senior consultant at recruitment specialist Korn Ferry.

With 50,000 jobs and $5 billion in investments at stake, here’s a look at the great lengths cities went to woo Amazon, and why the tech giant ultimately settled on two locations. (Photo: Reuters)

The Washington area is home to almost 210,000 employment-age veterans, the biggest metropolitan concentration nationwide, according to northern Virginia’s successful pitch for the new Amazon site.

The most sought-after are those with security clearances, a requirement for around 15% of the private-sector government IT and defense jobs advertised in the Arlington area that includes National Landing on recruitment site Glassdoor. The Pentagon is working through a backlog of 275,000 first-time applications for clearance, pushing wait times to more than a year.

The military is considering ways to ease the cleared-worker shortage, including by possibly allowing active-duty members to move more smoothly between civilian jobs and the armed services, said Navy Secretary Richard V. Spencer.

There should be enough talent for Amazon and other defense contractors, he said, adding that he doesn’t expect a competition.

However, recent changes to the military’s retirement plans could make it easier for veterans to enter the private sector. In 2018 the Pentagon created retirement accounts, much like 401(k) plans, that offer veterans benefits even if they serve only a few years. The new system frees them from a pension system that had required members to serve 20 years to qualify for benefits.

Corrections & Amplifications
Amazon.com plans to expand its roster of U.S. military veterans to 25,000 over the next three years. An earlier version of this article incorrectly said the company planned to add 25,000 more veterans. (1/1/2019)

Write to Doug Cameron at doug.cameron@wsj.com and Ben Kesling at benjamin.kesling@wsj.com