Amazon’s Influence: Unraveling Tony Hsieh’s Legacy at Zappos

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Benjamin leo July 16, 2023

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Amazon’s gradual dismantling of Tony Hsieh’s legacy at Zappos is becoming evident more than two years after the renowned entrepreneur’s passing. Last month, Zappos laid off over 300 employees, accounting for approximately 20% of the company’s workforce in Las Vegas, according to sources familiar with the matter and an internal memo from Zappos. These layoffs are part of broader staff reductions at Amazon, with an estimated 18,000 employees expected to be affected, equivalent to around 5% of its corporate workforce.

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The recent cuts at Zappos reflect a larger pattern of changes initiated by Amazon, gradually eroding the legacy established by Tony Hsieh. Hsieh, who served as Zappos’ CEO from its early days as an online shoe retailer, oversaw its acquisition by Amazon in 2009 for $1.2 billion. He continued to lead the company independently until shortly before his untimely death in November 2020 at the age of 46. Hsieh was known for his management prowess, evident in his bestselling book “Delivering Happiness,” and his significant contributions to the revitalization of downtown Las Vegas.

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One notable change at Zappos is the departure of Tyler Williams, a long-time executive and Hsieh’s trusted confidant, who left the company during the recent round of layoffs. Williams, who held the unique title of fungineer and embodied the fun and family-oriented culture fostered by Hsieh, confirmed his departure in a LinkedIn post, expressing his deep connection to Zappos.

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Among the affected areas in the recent Zappos cuts were customer service representatives, a division highly valued by Hsieh. Zappos’ commitment to delivering exceptional service was one of its core values, and Hsieh himself would occasionally answer customer calls during peak periods. Current CEO Scott Schaefer acknowledged the difficulty of the layoffs in an email to employees, highlighting the company’s need to adapt to an uncertain economy for long-term success.

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Zappos maintains that the January layoffs were part of its regular business planning, while asserting its commitment to ensuring an exceptional customer experience. A Zappos spokesperson emphasized that the company’s culture is not solely reliant on any individual employee. Zappos continues to operate independently, according to the spokesperson.

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Amazon, as Zappos’ parent company, expressed pride in the accomplishments achieved since the acquisition and reiterated its support for Zappos’ commitment to delivering exceptional customer experiences. However, former Zappos employees have noted concerns over the encroachment of Amazon’s more traditional management style, commonly referred to as “Amazon creep,” which Hsieh was cautious about during the acquisition negotiations.

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Hsieh’s unique values, such as fostering a fun and slightly eccentric workplace, treating employees like family, and experimenting with the management structure known as “holacracy,” have undergone changes and challenges since Amazon’s increased involvement. Pressure to meet growth targets, combined with Hsieh’s personal struggles, including drug and alcohol addiction and declining mental health, led to his resignation in the summer of 2020.

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As Zappos moves forward under Amazon’s influence, the gradual dismantling of Tony Hsieh’s legacy raises questions about the preservation of the distinctive culture and values he instilled in the company.