Main image of article Amazon, Facebook, and the Fight for New York City's Tech Talent

Earlier this year, Amazon abruptly canceled its plans to build a massive “second headquarters” (dubbed HQ2) in New York City’s Long Island City neighborhood. Now, it’s leasing 335,000 square feet of office space in the city’s enormous Hudson Yards complex, which will host more than 1,500 employees (they’ll join the 3,500 who already work at Amazon offices in the city).

Meanwhile, Facebook is in negotiations to lease 700,000 square feet in Midtown, adding to the 1.5 million square feet it, too, leases within Hudson Yards. That’s a little under 3 million square feet, putting the social network on similar footing to other huge corporate tenants such as Bank of America. (Combined, all of Facebook’s various spaces will host some 14,000 employees, according to The Wall Street Journal.)

The Amazon and Facebook expansions put some serious pressure on Google, which announced plans in December 2018 to build a “Google Hudson Square” that will occupy 1.7 million square feet and cost roughly $1 billion to build. That space will open in 2020; in the meantime, the company occupies a lot of office space in Chelsea Market, which it owns, and leases space at nearby Pier 57.    

There’s a reason behind Facebook’s massive expansion, of course, and it’s the same one that’s driving Amazon to lease a huge amount of office space even after its original HQ2 went down in gaudy flames: New York City offers a huge amount of tech talent, some of it very highly specialized in machine learning, data science, and other vital segments.

Of course, these aren’t the only local companies hiring; Verizon, Bloomberg, Microsoft, and other firms have posted dozens of jobs for technologists over the past 90 days, according to a breakdown from Burning Glass, which analyzes millions of job postings:

Nor are all those in-demand technology roles highly specialized; based on job postings, employers are on the hunt for software developers (by a wide margin), computer systems engineers, and analysts of all sorts. Clearly, there are apps to be wrangled and massive amounts of data to be analyzed. Check out the chart: 

But as the biggest tech firms expand their New York City footprints, it sets up a titanic fight for talent in 2020 and beyond. Companies such as Verizon and Bloomberg are clearly willing to pay top dollar for the talent they need, but can smaller firms out-bid a Google, Facebook or Amazon for the best machine-learning specialists and data scientists? Probably not, especially when you throw in other perks and benefits, including stock options and cash bonuses; for example, features a handful of Facebook’s New York City employees self-reporting salaries higher than $450,000 per year, once stock and bonuses are factored in.

The pull of companies and talent toward New York City also speaks to a larger problem potentially gripping the American tech industry: the crushing primacy of major tech hubs over smaller cities. A new paper by The Brookings Institution suggests that the top “innovation metro areas” are accounting for too much of the nation’s “innovation-sector growth” (although, curiously enough, it leaves New York City off its list of metro areas), depriving hundreds of metro areas of tech jobs and opportunities.

This doesn’t just harm those smaller municipalities. Within the key tech hubs, the fight among an escalating number of companies for a limited pool of talent becomes downright desperate. When we recently analyzed New York, San Francisco, Boston, Seattle, and Austin, we found time-to-fill for jobs such as software developer/engineer was actually quite lengthy. Moreover, these hard-to-fill jobs covered a wide range—worrisome for any company in those cities trying to hire a variety of technologists:

As the biggest tech firms expand in New York City, watch for the fighting over specialized technologists to become absurdly fierce. That’s good news for those specialists who have the right mix of skills and experience to kick off a (metaphorical) knife-fight between tech giants and their respective checkbooks. But for smaller companies in New York City that want technologists with skills, things over the next few years could get a little rough.