Amazon-Owned Zappos Fires More Than 300 Workers: Report.
HIGHLIGHTS:
- Since last month, Amazon has eliminated over 300 positions at its Zappos subsidiary.
- Some employees who lost their jobs at the shoe and clothes business were customer care representatives.
Over two years after the passing of the renowned entrepreneur Tony Hsieh, Amazon Inc. is gradually destroying his take on Zappos. According to persons familiar with the layoffs and a Zappos memo, the online retailer fired more than 300 workers last month or nearly 20% of its workforce. Zappos is situated in Las Vegas.
The Journal reports that the Amazon layoffs, which are expected to affect more than 18,000 employees, or about 5% of its corporate ranks, include those at Zappos. According to others acquainted with the companies, they are also the most recent in a string of steps taken by the former parent firm of Zappos that have primarily destroyed Mr Hsieh’s legacy.
Mr Hsieh operated as the company’s CEO from the time the business was launched in the early 2000s as an online shoe shop until Amazon acquired it in 2009 for a price of $1.2 billion. The company was managed without involvement only a few weeks before his 46th birthday in November 2020. Because of the popularity of his best-selling book, “Delivering Happiness,” he rose to prominence as a management visionary and a prosperous downtown Las Vegas developer.
One of the most significant changes at Zappos is reportedly Tyler Williams’ departure. Williams was a longstanding executive and Mr Hsieh’s right-hand man for a long time. During the latest round of cutbacks, Williams departed the organisation.
Mr Williams, who joined Zappos 12 years ago and held the initial position of fungineer, served as a symbol of the lighthearted, family-oriented culture that Mr Hsieh had cultivated at his business for many of the company’s employees. In a LinkedIn post this week outlining his tenure at the company and stating that he will “always be a #Zapponian at heart,” Mr Williams announced his resignation.
According to sources acquainted with the companies, Mr Hsieh had longstanding admiration for the customer service department at Zappos, which recently let several employees go. One of Zappos’ 10 guiding principles is to “deliver WOW via service.” When things were busy, Mr Hsieh responded to customer calls.
CEO Scott Schaefer of Zappos, echoing the sentiments of other IT industry leaders after new layoffs, termed the news as “harrowing news” in an email to employees in January. He wrote to workers, “As we move into 2023, we are still dealing with an uncertain economy, which prompted us to continue taking a close look at our business and responding in a way that guarantees we are set up for long-term success.
According to a representative for the company named Laura Davis, the reductions in January were part of Zappos’ usual business planning. She stated that the layoffs were “ultimately made to guarantee Zappos is set up to continue to provide an amazing customer experience, long-term”, regarding the customer service section. She later clarified, concerning Mr Williams’ exit, “The Zappos culture does not reside in one specific employee.
According to Ms Davis, Zappos nevertheless runs its business independently. We’re happy with all Zappos has accomplished since partnering with Amazon in 2009. According to an Amazon spokeswoman, we continue to support their continuous dedication to offering the finest customer experience.
On the condition that Zappos maintain its autonomy, Mr Hsieh agreed to sell the company to Amazon. Over the years, he was concerned about what former Zappos employees called “Amazon creep,” defined as Amazon officials becoming more involved and imposing their more conventional management style.
One of Mr Hsieh’s guiding principles was to “Create fun and a little craziness.” He threw costly parties and happy hours for his workers and treated them like family. He started the widely-followed “holacracy” management experiment, which promoted a decentralised management structure with practically no bosses. Some units ceased utilising the system due to the bureaucracy it produced.
According to the former workers, by 2019, Amazon was putting pressure on Mr Hsieh and his team to achieve specific development goals. According to the Journal, Mr Hsieh was battling a growing drug and alcohol addiction at the same time. His mental state deteriorated as well. According to the former employee, by the summer of 2020, he was abruptly resigning from his position at Zappos due to pressure from Amazon to perform better.
Before his death in 2020 from smoke inhalation caused by a house fire in Connecticut, relatives and friends, notably Mr Williams and the band Jewel, attempted to assist him.
Following Mr Hsieh’s departure, there has been turmoil within Zappos.
After roughly a year, his successor as CEO, Kedar Deshpande, resigned. Before leaving, he tried to get the business back on its e-commerce platform, largely abandoning Mr Hsieh’s experiment in holacracy. Approximately 300 staff were let go as part of a series of buyouts in late 2020, even though Zappos had already hired back additional people.
Mr Schaefer, a seasoned member of the Zappos team who has overseen numerous “staff reductions,” as he hinted in his January message, succeeded Mr Deshpande. Amazon has already absorbed a few Zappos departments. Other modifications were more symbolic: Recently, Amazon replaced Zappos’ distinctive white, branded boxes with the basic brown packaging used by the parent business.
When it benefits both our company and our consumers, such as logistics, fulfilment, and information technology, Ms Davis said Zappos and Amazon collaborate to avoid doing the same thing twice. She stated that “in certain conditions,” the white box would still be used.
According to the people familiar with the companies, Amazon is generally considerably more involved with Zappos and its business choices than it was under Mr Hsieh’s leadership. Although it has yet to achieve all of the growth objectives put forth by Amazon, Zappos is currently profitable, according to its claims.
In his LinkedIn article, Mr Williams highlighted some of the critical professional turning points he had during his 12 years with the organisation, such as “placing a 68-foot Giant Butterfly as a temporary shade structure over our campus plaza.” A singer named Mr Williams, who sports a long, red beard, claimed that the attempt “failed dramatically when a once in a decade wind storm brought it down less than a month later.”
edited and proofread by nikita sharma
