Tony Hsieh’s Zappos management experiment continues, and the results may not be as rosy as the leadership team had hoped.
According to a blog post on Zappos.com, around 260 employees, or 18 percent of Zappos staff, have taken a buyout offer from the e-tailer after the company moved to a manager-free internal organization called Holocracy.
While the transition to the new management structure has been occurring, Zappos has also been in the midst of another major project — migrating its servers to parent company Amazon.com’s servers. The project was known within the company as Super Cloud. Zappos offered employees who stayed on and worked on migrating the back end a delayed buyout to finish the project and then exit.
The firm announced last week that of the Super Cloud group, 38 percent of the group, or 50 employees, took that extended buyout offer, bringing the total count of employees accepting the buyout to 260.
“While we have lost a number of folks, it is important to note that we have a significant group of highly talented individuals who will be staying to help move Zappos forward,” wrote Arun Rajan in the Zappos blog post.
The company has been moving to the new internal management model that eliminates managers since March 2015. Tony Hsieh, Zappos’s founder and de-facto CEO, has long encouraged an unconventional workplace, shunning titles and a typical management structures. He told employees in 2015 that Zappos was moving to a fully manager-free structure and offered employees who didn’t wish to continue with the new setup a buyout of three months severance and three months of benefits.
“This is a new, exciting and bold move for Zappos. Like all the bold steps we’ve done in the past, it feels a little scary, but it also feels like exactly the type of thing that only a company such as Zappos would dare to attempt at this scale,” wrote Hsieh in a memo to his staff announcing the change. “With our core values and culture as the foundation for everything we do, I’m personally excited about all the potential creativity and energy of our employees that are just waiting for the right environment and structure to be unlocked and unleashed.”