From my brilliant buddy Owen Frager, a heartfelt and touching letter from Tony Hsieh, CEO of Zappos. Reprinted here with respect and gratitude.
“Last week was a tough week for everyone, as we went through the process of laying off 8% of the Zappos family. At the same time, it was also heartwarming hearing all the stories of Zappos employees and ex-employees getting together for drinks Thursday night after the layoffs as well as over the weekend.
The economic environment we’re in right now is unlike any we’ve ever witnessed in our lifetime. These are extraordinary times, and America is not out of the woods yet. Many people expect 2-3 million Americans to lose their jobs before we hit the bottom of our current economic cycle.
As difficult as times may be, if there’s one thing I’ve learned in life, it’s that things are never as bad as they seem or as good as they seem. In most cases, this perspective usually comes long after a “bad” or “good” event has occurred.
This is actually the second time we’ve had to do layoffs across the board at Zappos. We’ve been around for 9.5 years, and the first time we had to do layoffs was during the early years of the company, when we laid off about half our staff due to a bad economy and our inability to raise funding. At the time, we still were not profitable.
However, the layoffs we did in the early days forced the team that remained to become much stronger, and because we did not have a lot of money at the time, it forced us to focus on servicing our existing customers instead of trying to acquire a lot of new customers. Ultimately, it was the catalyst for transforming Zappos from being just about shoes to a company focused on customer service and company culture. It started a domino effect that ultimately made us who we are today.
Moving forward, we have a similar opportunity. We have the opportunity to make our culture stronger than ever before. It’s something that will require everyone’s involvement and effort, but based on our history, I know it can be done.
We also have the opportunity to make the company healthier than ever before. As we come up with innovative and creative ways of generating more revenue, profits, and cash flow, we will be prioritizing them based on what will be most beneficial to our company.
One question that has come up is whether we will be doing another round of layoffs after the new year. There are currently no plans to do so. When we laid off 8% of our employees last week, we chose that number because we felt that it would cut our expenses enough to get us through all of 2009, based on our current financial forecasts. As mentioned in my previous email, our layoffs were done proactively to ensure that we would be profitable and cash flow positive in 2009.
As part of reducing our 2009 expenses, and to bring us all closer together, we are in the process of moving people so that everyone in our Las Vegas offices will be either in the 2280 or 2290 building, which are next door to each other. The moving should be completed over the next couple of weeks.
We’ve got a busy holiday season ahead, and while everyone will be busy and working hard with their individual jobs, let’s also make a conscious effort to think about how we can help each other out even more than usual, not just within your department, but cross-departmentally and throughout the entire company as well.
Remember, this is not my company, and this is not our investors’ company. This company is all of ours, and it’s up to all of us where we go from here. The power lies in each and every one of us to move forward and come out as a team stronger than we’ve ever been in the history of the company.