Economy forces layoffs at Zappos.com

The depressed retail industry is forcing shoe retailer Zappos.com to lay off 8 percent of its work force and consider the closure of factory outlet stores in Kentucky and Nevada.

Earlier this year, Business First reported that Las Vegas-based Zappos.com had 810 employees between two Shepherdsville distribution facilities.

There were 712 total employees at the time of the layoffs, which affected 16 Shepherdsville employees, Craig Adkins, manager of the Shepherdsville operations, said in an e-mail.

Those 16 workers were responsible for human resources, photography and information technology functions, Adkins said.

Adkins added that plans call for Zappos.com to keep open its Shepherdsville outlet store.

“This is one of the hardest decisions we’ve had to make over the past 9.5 years, but we believe that it is the right decision for the long term health of the company,” Zappos.com CEO Tony Hsieh wrote in a Nov. 6 blog post on the Zappos.com Web site.

Hsieh wrote that the layoffs were in connection with a directive from stakeholder Sequoia Capital to “cut expenses as much as possible.”

He wrote that despite the down economy, the company expects gross sales of about $1 billion in 2008, up from about $840 million a year ago.

Hsieh wrote that each laid off employee will be paid through the end of the year and employees who have been with the company for three or more years will receive an additional payout. Employees also will be reimbursed for up to six months of COBRA medical, dental and vision insurance coverage.

“E-commerce growth has slowed compared to its growth rate a year ago, but the good news is that even in this tough economic environment, e-commerce overall is still growing,” Hsieh wrote.