210 Zappos employees -- 14% of the staff -- take buyouts after CEO ultimatum to embrace self-management or leave

Tony hsiehDanny Moloshok/ReutersZappos CEO Tony Hsieh.

Zappos, the Amazon-owned online retailer, has confirmed with the Las Vegas Sun that 210 of its 1,503 employees — nearly 14% of the company — took a buyout deal after CEO Tony Hsieh announced the company was completely ridding itself of manager roles and job titles.

The company, well-known for its experiments with corporate culture, has been transitioning to a self-management organizational structure known as Holacracy since the beginning of 2013. Heading into this year, about 85% of the company had made the transition.

Hsieh sent a nearly 5,000-word company-wide memo in late March that explained that any employee who was not satisfied with the transformation could leave with a severance package by April 30. The memo was leaked by Quartz and later published by Zappos on its Insights blog.

“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-organisation,” Hsieh wrote.

To get their severance, employees had to be in good standing with the company. They were also asked to indicate by email that they had read the management book “Reinventing Organisations” and disagreed with its manager-free vision or else state that they were not reading it. According to the book’s author, Frederic Laloux, about 600 to 700 employees downloaded a free ebook version that was linked in Hsieh’s email.

John Bunch, technical advisor at Zappos and leader of the Holacracy transition, told Business Insider shortly before the April 30 deadline that the memo’s severance package offer raised many questions among employees about what the company’s future looks like, and that those questions still exist today.

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