Zappos cuts work force by 8 percent

Henderson-based online shoe company Zappos.com will be laying off 8 percent of its work force, stretching across almost every department, the company’s chief executive officer wrote in his blog.

Zappos is also considering closing brick-and-mortar outlet stores in Nevada and Kentucky.

The company held a “surprise” meeting Thursday morning to notify its workers of layoffs, a source told the Review-Journal on Friday.

Rumors had circulated throughout Zappos offices in Henderson for the past week or two that sales are flat or declining and layoffs were coming, the source said.

“Today has been a tough, emotional day for everyone at Zappos,” Chief Executive Officer Tony Hsieh wrote to Zappos employees on Thursday. “This is one of the hardest decisions we’ve had to make over the past nine-and-a-half years, but we believe that it is the right decision for the long-term health of the company.”

The company is a major employer in the Las Vegas Valley with about 700 workers. Gross sales at Zappos rose from $1.6 million in 2000 to $840 million in 2007.

Zappos is offering to pay each laid-off employee through the end of the year, plus an additional amount for employees with three or more years tenure. The company is also reimbursing up to six months of Consolidated Omnibus Budget Reconstruction Act health care payments.

Southern Nevada has experienced layoffs in several sectors, including construction and hospitality and gaming. The unemployment rate has risen to 7.4 percent from 5.1 percent a year ago. However, total employment has remained about the same, showing a 0.1 percent increase to 924,100, according to the Nevada Department of Employment, Training and Rehabilitation.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.