I recently visited Zappos and enjoyed a day of fun & festivities. I talked to employees, I ate candy, and I was given some Zappos swag. It was a fun day in the desert, and I really love the idea of working for a different kind of company — one that’s fun.
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Some of the other HR pros on the tour asked the management team about the cost of employee ‘entitlement programs’, employee benefit programs, and the pressure of meeting the financial demands of your private investors.
There was an assumption from the other HR pros that you can’t spend money on employees and operate a financially savvy corporation. You know what? I totally dislike those stodgy, stuck-in-the-mud Human Resources professionals who feel that you can’t invest in your employees and make a profit. That kind of thinking represents an outdated framework of management versus labor.
We’re all labor, aren’t we?
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That being said, I was sad to read this.
Today has been a tough, emotional day for everyone at Zappos. We made the hard choice of laying off about 8% of our employees. The layoffs will affect almost every single department at Zappos. In addition, we are also looking at closing some of our brick and mortar outlet stores in Nevada and Kentucky.
Now the real challenge emerges for Zappos: how does the organization move forward and retain its focus on employees while trying to employ more traditional, conscientious ways of spending investor capital?
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I was so sad to read this! However, I’m glad they didn’t go the traditional route of cutting out all fun stuff and benefits to keep the company in the green. that may sound backwards, but I generally believe most organizationa are overstaffed. It is never fun to lay off employees, but sometimes it is crucial for the health of the company. Culture is also key to the company’s health. I’m glad Zappos did not decide to cut out their culture.
To add to Breanne’s point, somebody told me a quote of what you can tell if it’s a successful business, “If they make a proactive approach, even if it’s not popular among employees, their business will be successful down the line. If you react, it’s too late for your company.”
At least it’s a close group and a support system that these laid-off employees will get jobs sooner than later.
@Breanne I think you’re right that culture is the key to the company’s health. This layoff will have a temporary impact to that wonderful sense of “fun” but I hope it’s not permanent.
@Tracy As always, well said.
Lay off [redacted] from the Order Verification department he is the biggest dick head!
No, I’m sure he’s not a dickhead. I’m sure he’s a nice guy. I think I met him.
I recently (ish) started work for a company who believes in “fun”. I have to say I’ve never been as productive or learned so much in my life. I’m just hoping that they don’t sacrifice their culture for a few extra pennies on some budget line (which they would instantly lose in goodwill and productivity on some less easily measured line. Dumb, and I really hope they don’t, but so many companies do.) So far so good though. It’s still great, and I’m still finding myself shaking my head in disbelief on a daily basis at how fabulous it is to be treated in such a civilised manner.
I wish Zappos and their employees the very best of luck.
It’s widely reported/suspected that Zappos layoffs were forced by their outside investors, namely Sequoia Capital. Here’s a list of companies they have invested in:
http://www.crunchbase.com/financial-organization/sequoia-capital
Quite a few have experienced layoffs of at least ~10% of their workforce in recent weeks.
@Marie: Really?? You’re hoping that someone gets laid off because you don’t have a positive personal opinion of him? I really hope karma catches up with you.
@Joseph: Sequoia has been calling on all companies under their umbrella to cut costs. Considering that…at least from what I heard…many of their employees laid off were ‘problem’ employees anyways, it seemed like a purge of unnecessary/unreliable personnel than a blanket lay-off.
oh please! if the company REALLY was concerned about their “family” they would have cut everybodys pay by 10% to keep its employees and not burn the 130+ brothers and sisters! wake up you naive fools, no company really cares about their employees, its the USA!! money is king! and for tony , its just a hobby to stroke his geeky ego, and his dorky friends that work there as well!!!
Zappos has very very high turnover so it is unlikely that there exists 10% of that company who were problem employees. They fire the ones they do not like anyway based on the numbers of ex-Zappos employees on Facebook/Linkedin, whatever. Also, you can be sure their legal department made them sign something that will not allow them to speak about the company at all in order to get their desperately needed severance. So no employee who has a negative opinion is going to twitter about it.
Think Steve Jobs here. Control your PR, media and image to control your brand. Create a cult of personality around your CEO so that no one asks too many questions.
So how about these questions:
1. After YEARS of hinting at going public, they are no where near doing so and there has never been a whiff of anyone buying them out.
2. What in the wide, wide world of GAAP accounting is Gross Merchandise Sales?? Transparency means “what were your top line revenues (using GAAP)?” Not some inflated number that doesn’t acknowledge the huge return rate in their industry (and for which they pay for anyway via free shipping they encourage).
Yes, invest in your employees!!! They are your biggest expense but your biggest asset. Clearly based on you guys who have been there you see that in practice and there is surely a glimmer of humanity in these guys that you can not see elsewhere.
BUT that does not mean the layoffs aren’t indicative of a larger problem there with capacity planning, business model, etc. At the end of the day they will need to make a profit. It makes you wonder.
-Exiting Oversized Soapbox Now