Zappos Holacracy Results: 210 Employees Accept Buyout Instead Of New Business Model

Zappos is trying a new business model style called Holacracy. 201 of their employees took a buyout instead.

The Consumerist is reporting that Amazon-owned Zappos, which sells clothes and shoes online, is ushering in a new business model from top to bottom. Called Holacracy, it’s a business model where it is felt that there are no need to have managers, or titles, such as manager. Essentially, all Zappos employees have equal status, working as one unit, free from the burden of titles and headaches. Zappos CEO Tony Hsieh sent a massive e-mail out three months ago, spelling out the new policy change. Those who were not comfortable with the new business model would be allowed to opt for a buyout from Zappos and pursue other interests.

Of the 1,503 employees, 210 of them, or 14 percent, opted for the buyout and left Zappos. Those who were recently hired within the last two months by Zappos would get a $2,000 buyout. All employees had until April 30 to decide.

While Zappos confirmed the number of employees leaving the company, Zappos declined to list what previous positions the departing employees held before they left. An unidentified Zappos employee, speaking on conditions of anonymity, said many of the departing staff left for a myriad 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,” he tells the Post. “Ultimately, however many people took the offer is the right number because they are doing what is best for them and for Zappos.”

According to the Business Insider, Zappos said they have completed 85 percent of the transfer to the new self-management structure.

Zappos, well-known for its experimental business styles, have been transitioning to the new model since early in 2013.

Hsieh has sent out a 5,000-word missive giving details of the change, and spelled out details of the severance. Hsieh felt Zappos needed to commit to the self-managing style quickly.

“Having one foot in one world while having the other foot in the other world has slowed down our transformation towards self-management and self-organization,” Hsieh wrote.

To be eligible for the severance package, a Zappos employee had to be in good standing with the company. Employees were also asked if they intended to read “Reinventing Organizations” by Frederic Leloux. Those who chose to read it were able to download a free copy from a link Hsieh put in his email. Almost 700 Zappos employees downloaded the e-book.

Hsieh’s email raised many questions about Zappos’ future that still exist, according to John Bunch, technical adviser at Zappos, and Holacracy transition leader.