Zappos’ CEO Gives His Staff an Ultimatum, Over 200 Workers Quit Shortly After

Since the beginning of 2013, Zappos’ CEO Tony Hsieh adopted the Holacracy structure to run his company. What is a holocracy, you ask?

The traditional model of running a company is the top-down authority approach aka “the hierarchical corporate culture model,” where you need to consult with superiors before making decisions. A holocracy distributes the power evenly throughout the whole organization. In this structure, there are no manager roles and job titles. This, in theory makes decision making and getting things done in an organization much faster. See the explanation video below:

Back in March, Hsieh sent a company-wide memo offering employees three months’ pay to quit if they were not happy with the transition by April 30 — they just had to be in good standing with the company. In addition, they had to write an email stating that they had read the management book “Reinventing Organizations,” and either note that they disagreed with it or that they weren’t going to read it.

Out of the company’s 1,503 employees, 210 quit — 14% of the company’s staff.

This is not the first time Zappos has done something so unorthodox. The company is known to pay new employees thousands to quit to ensure they’re committed to their work, according to a 2008 report on The Harvard Business Review.