210 employees leave Zappos over ‘no managers’ policy

With reports of 14 percent of the company’s employees choosing to leave spreading, the online retailer is offering an explanation.

Last year, Zappos turned over its company structure to a Holacrazy, which means the vast majority of employees do not have a manager.

How’s that working out for them, you may be wondering.

In March, the company’s CEO, Tony Hsieh, offered an out to employees who weren’t enjoying the new company culture. They had until April 30 to decide whether they would stay under the new regimeless regime, or they could bolt and take three months’ pay as severance.

In a Holacracy, traditional job titles are eschewed in favor of doling out a changing roster of roles to employees.

Business Insider described the approach last year:

Rather than being accountable to a single boss in a traditional hierarchy, each employee reports to the other people in their “circles.” Each circle has an organizational goal to achieve, and each role that people fill within the circle is a task necessary for accomplishing that goal.

The deadline for Holacracy buy-in has now passed, and The Washington Post reports that 210—or 14 percent—of the company’s workforce took the buyout.

Now, this doesn’t exactly mean that all 210 fleeing employees thought negatively about the Holacracy. It’s a job seeker’s market right now, so some of them probably just wanted to take a few months to relax while they found the next thing.

However, Zappos’ internal issue is now a PR matter, with reports spreading. John Bunch, the man tasked with transitioning the company to Holacracy, admitted to the Post previously that the approach hadn’t “resonated as strongly” with some employees.

He added:

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.

This isn’t much different from the company’s standing offer to any employee: If an employee doesn’t think that he or she is a good fit for Zappos, the company will give them $2,000 to take a hike.

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