Walgreens plans big tech office in downtown Chicago

Dive Brief:

Walgreens will move 1,800 technology jobs to a downtown Chicago landmark, the Old Post Office building, in the fall of 2019, according to a press release. Five hundred employees will move from another downtown office and 1,300 from Walgreens’ suburban campus in Deerfield, Illinois, which will continue to house 3,200 workers.
The Technology Center of Excellence will combine and expand Walgreens' retail pharmacy technology, digital, mobile and e-commerce teams, according to the Chicago Tribune. The new offices also will include information technology workers and office staff.
The Old Post Office is one of 10 Chicago-area sites proposed to Amazon for its second headquarters. It is not clear whether the Walgreens' move will have any effect on Amazon’s search. Walgreens has said it will not receive any tax incentives for making the move, although landlord 601W will get historic tax credits totaling $100 million over the life of the redevelopment of the Old Post Office, noted the Tribune.

Dive Insight:

Walgreens’ decision to consolidate technology teams in downtown Chicago is yet another indication of the growing importance of IT-related personnel for retailers. It will mark an expansion of Walgreens’ technology worker ranks, and bring them together in an environment where cross-functional cooperation will be possible.

The 2.8-million-square-foot Old Post Office also will contribute to Walgreens’ ability to recruit tech talent because of its downtown location and many planned amenities, including four acres of rooftop park space, a fitness center, restaurants, shops and entertainment, noted the Chicago Tribune. Walgreens is the first tenant in the massive Art Deco building, the former main post office for the city, which has been vacant since 1996. The company has not yet decided whether it will locate a drugstore on the property.

There is a widespread tech job expansion across all of retail, most notably within bigger companies. A study by LinkedIn showed that the number of people identifying as retail associates on their profiles declined 41.4% from 2013 to 2017, while the number in engineering and IT jobs rose from 7% to 9% in that time span, and "software developer" became the third most popular job title in retail in 2017, ranking up from eighth in 2013.

Among retailers, Amazon is leading the pack and is expected to add thousands of technology workers this year – 2,000 in Boston, 3,000 in Vancouver, Canada and 200 in Minneapolis. Walgreens is adding 300 tech jobs in Chicago and Home Depot is adding 1,000 technology employees. Kroger has been named to Computerworld's "Top 100 Best Places to Work in IT" for 2018 while the Walmart Labs careers website page recently listed 404 openings for technology positions in California, Arkansas and other locations across the country. This hiring activity comes after Walmart laid off over 1,000 corporate workers.

"Investing in our infrastructure and building our digital and technical capabilities are essential elements of our business transformation strategy, as we work to improve access for our customers and enhance the customer experience," said Alex Gourlay, Walgreens’ president in a press release. "The space in the iconic Old Post Office building allows us to attract and retain the best talent from all of Chicagoland." Walgreens is part of the Retail Pharmacy USA Division of Walgreens Boots Alliance.

Because the Old Post Office is one of 10 proposed sites in the Chicago area for Amazon’s second headquarters, there has been speculation that Amazon has crossed Chicago off its list, noted CapitolFax.com, an Illinois political newsletter. Officials are not commenting, but the Walgreens office is small compared to the Amazon plan – 1,800 employees vs. 50,000 – and it involves just one of multiple sites in the area under consideration by Amazon. Chicago Mayor Raum Emanuel has said Amazon "really likes" two of the sites.

It is possible that Amazon has just decided against the Old Post Office, or its landlord has decided against Amazon. "We’ve been plowing forward with different tenants, so I think at this point — we’re going a different direction," Brian Whiting, a developer with The Telos Group, a real estate services firm in Chicago told CapitolFax.com. "We’re not waiting for them (Amazon), and we’re on to the next and best thing."