Some 210 Zappos employees take buyouts with manager-free policy

Zappos’ new manager-free policy has resulted in 210 out of 1,503 employees — nearly 14 percent — accepting a buyout deal from the Las Vegas-based online shoe and apparel retailer.

The severance deals were expected because Zappos CEO Tony Hsieh had informed staff in an email more than a month ago that the company would be eliminating managers as part of Zappos’ transition to a “holacracy” work environment by the end of April.

Hsieh told the Las Vegas Review-Journal on Wednesday that Zappos had no specific number in mind in anticipating the number of buyouts.

“Not everyone is comfortable with self-management and self-organization. Some people like being told to do steps one through ten. So we just wanted to make sure that the offer was generous enough for people to make the right decision for themselves,” Hsieh said. “Prior to emailing out the offer, we already had planned on hiring more employees, so this just means we need to increase those hiring plans even more than before.”

Hsieh said workers who chose the buyout received either three months of severance pay, or one’s month pay for every year worked — whatever was higher.

The buyouts come as no surprise because Hsieh alerted the Zappos work force more than a month ago about the manager-free work environment: “As of 4/30/15, in order to eliminate the legacy management hierarchy, there will be effectively … no more people managers,” Hsieh wrote in a long memo to workers.

The prospect of no managers “feels a little scary,” Hsieh told staff in the memo.

“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,” he wrote in the memo.

Zappos is owned by Amazon.com Inc. and is headquartered in the old City Hall building in downtown Las Vegas.

Hsieh has built a reputation as an entrepreneur who focuses on work culture, with Zappos workers carefully screened, interviewed and hired for not only their skills but also their abilities to fit into the Zappos way that emphasizes creativity, humility and not being egotistical.

“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,” Hsieh wrote in the recent memo.

Hsieh told the Review-Journal last month that the transition to holacracy has been going on for 1½ years and that it’s not a cost-savings move.

“I can’t wait to see how we reinvent ourselves, and I can’t wait to see what unfolds next,” Hsieh told workers in the memo about the transition to a manager-free workplace.

Contact reporter Alan Snel at asnel@reviewjournal.com or 702-387-5273. Find him on Twitter: @BicycleManSnel