Zappos Loses 210 Employees

Zappos_teamBack in March, Zappos announced a new management structure-or lack of structure-and offered employees three months' severance pay if they didn't want to deal with it. In CEO Tony Hsieh's email to employees, he explained the organization's process of Holacracy: moving towards self-management and self-organization. The company is striving to be a "teal organization" described in the book Reinventing Organizations

Although 210 (14% of employees) chose the severance deal, it's unclear whether it's because of Zappos' management direction or a strong economy with better job opportunities. John Bunch, who's leading the effort at Zappos, said, "The offer was a big incentive to leave Zappos, and people took the offer for various reasons. Some Zapponians took it because they are not in line with the vision of the company, others took it to pursue other passions including starting businesses. Ultimately, however many people took the offer is the right number because they are doing what is best for them and for Zappos."

Hsieh has a history of offering employees money if they choose to leave the company. The company pays employees $2,000 if they quit. Presumably, this encourages people who aren't happy (and perhaps the company isn't happy with them either). 

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Discussion Starters: 

  • The Washington Post article is titled, "At Zappos, 210 employees decide to leave rather than work with 'no bosses.'" Is this a fair characterization given the quotation by Bunch? 
  • What's your view of Zappos' practice of offering money for employees to leave the company? What are the benefits and risks?