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Construction Delays And Budget Cuts: Is Apple's New HQ In Peril?

Probably not—but new changes to Jobs’s grand plan illustrate the changing face of the company.

Some 13,000 employees and 6,000 trees. An 8-MW PVC roof and 4 miles of 40-foot-wide panes of cold-bent glass, prefabbed in Germany. A $5 billion budget.

Steve Jobs’s vision for Apple’s new headquarters was never austere. But according to an interesting report from Bloomberg Business Week, ballooning costs have spurred Tim Cook to push back the target move-in date from 2015 to 2016, in hopes of cutting costs by at least $1 billion.

An expensive new building, to a certain extent, is the least of Apple’s worries. After all, $1 billion isn’t even a single percent of their total cash reserves, as the article notes. But it adds insult to injury for some investors—one major shareholder suggests that the cost "is rubbing salt in the wound, to spend at a level that most anyone would say is extravagant, at a time when they’re being so stingy on dividends."

What’s more, critics are beginning to question the design itself, according to author Peter Borrows. The circular shape could isolate teams and departments in the long run—and after all, wasn’t Jobs one of the first proponents of work spaces where employees run into each other and mingle randomly?

Aesthetics seem to trump productivity, says Scott Wyatt, a managing partner at NBBJ, a Seattle-based architecture firm that’s designing offices in the region for Google and Samsung. "I would be concerned that it would be alienating, as opposed to convening." Rather than making it a great place to work, Wyatt says, "it seems more like an object, just like the iPhone is an object."

The four-page story reveals some pretty interesting details, including anecdotes about Jobs’ vision for the building’s details, which recall the perfectionism he applied to product design. Most of the building’s excessive cost comes from the interior finishes—like polished terrazzo floors, which are more common in museums than offices. Likewise, Jobs insisted on a minuscule 1/32nd of an inch clearance for detailing—for most American construction projects, 1/8th of an inch is standard. According to Burrows, the project may run into trouble finding subcontractors, simply because of the building boom in San Francisco.

Still, Burrows concludes that Foster’s building will inevitably be built—if only to prove that the company is still committed to Jobs’s vision:

Apple may have more money than Croesus, but without Jobs’s star power and maniacal control, it’s becoming more like other big, conventional companies. Ironically, that may be precisely why Jobs’s spaceship will one day land in Cupertino, regardless of cost. To backtrack now would be tantamount to admitting it.

Read the full story here.

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  • robermat

    That share holder comment made me cringe. Share holders are the root of corporate greed. They push the quarterly profit agenda and are all about short terms gains, not substance. Keep manufacturing jobs in the US? Not if share holders want their dividends. Build a beautiful building that rivals the Louve or Empire State building? Not if share holders want their dividends. Uggg

  • working_dan1

    For the construction to take place in Cupertino "New Apple Headquarters Project"; 

    Hope the construction to build Steve Jobs dream, will give union locals in the area first chance at the construction. Being a local here in the area, I have been disappointed other non-local companies coming to our area (lowest bidders) to take the jobs. 
    When many people here in the area that buy the product, lost jobs in area where they live. Also check company background experience, see how many on job accidents, and not being up to date in safety practices. 

    Noticing on other construction jobs, all the workers taking their money earned here, back out of state. They take the local jobs, and not spending all their money in the area either. I am tired of us not keeping our jobs in the area.

    I know Silicon Valley always being the leaders in the Country. We have some of the most qualified professional to do the best work in the Country. Please hire locals in the area of construction being built. 

    Thank you,
    Local resident / local union worker

  • RinSF

    I suspect - I hope! - that the architects envisioned a photovoltaic (PV) roof rather than one made of poly vinyl chloride (PVC).