Amazon is no longer Seattle's top employer, but its Bellevue headcount continues to climb

Amazon confirmed Friday it now employs about 49,000 people in its hometown, Seattle. That's down from a peak of 60,000 in 2020.

The reduction in force means Amazon has relinquished its title as Seattle's largest employer to the University of Washington, according to a report from the Seattle Times. Meanwhile, Amazon has more than quadrupled its Bellevue headcount over the past few years. The company now employs about 15,000 people across Lake Washington.

For years Amazon has said it will focus its future growth on the east side, which has a more business-friendly reputation. The company has shifted key teams, like its worldwide operations organization, to Bellevue in recent years. City of Bellevue reports show Amazon has more than quadrupled its headcount there since 2020. Amazon now refers to the broader Puget Sound region as HQ1.

Amazon has been at odds with the Seattle City Council for years over several tax proposals aimed at raising revenue from big business to fund affordable housing and other services.

But there are forces beyond politics driving this shift. Amazon's overall footprint is shrinking. The company has laid off thousands of workers over the past few years in the Puget Sound region. Amazon’s total employment in Washington state declined for the first time in company history last year.

That contraction could have implications for the Seattle tax base. Amazon is the largest payer of Seattle's JumpStart payroll tax, which passed five years ago to fund affordable housing and other projects. Initially the tax brought in more money than the city expected and the mayor used it to plug budget holes. Now there are signs of revenue from the tax flattening as companies like Amazon reduce their headcounts in the city.

There could also be implications for the real estate market. Since 2020, Amazon has moved out of more than 1 million square feet of office space in Seattle, according to the Puget Sound Business Journal. Office vacancies are at a record high of 34.7%.

It's a major shift from the pre-pandemic era, when Amazon's insatiable growth led to a shortage of office space downtown. It mirrored a trend in residential real estate. Many blamed the influx of high-paid tech workers for Seattle's skyrocketing housing costs. But unlike commercial real estate, the cost of housing remains persistently high. Only time will tell if Amazon's shrinking footprint will release that pressure valve.