Las Vegas, Nevada 
 
 Last spring, online retailer Zappos gave its employees an ultimatum: adopt the company’s strategy for self-organization, or leave. Approximately 14% of the company’s 1,500 employees accepted a buyout offer, which included several months’ severance. A small subset of the company was given an extension until the end of the year to make a decision because of their involvement in Super Cloud, a years-long migration to parent company Amazon’s technical infrastructure. 
 
 With that deadline now past, the company announced last week that about 50 employees, or 38% of the Super Cloud group, accepted the buyout (that number doesn’t include the 17 members of the Super Cloud team that accepted the original offer). This raises the percentage of voluntary departures in connection with what the company has coined “the Teal offer” to 18%. (“Teal” refers to an ideal state of self-organization outlined in management thinker Frederic Laloux’s 2014 book Reinventing Organizations.) 
 
 Zappos COO Arun Rajan conceptualized Super Cloud back in 2012, when he was CTO. “About 80% of engineers were spending time keeping the lights on,” he tells Quartz (Rajan briefly left the company in 2013 and returned as COO in 2014). He proposed using Amazon’s technical infrastructure for backend functions like the site’s checkout service and email, so that the company could focus on innovating and improving other technical offerings like mobile and data-driven services. For example, Zappos is developing ways to sell products to customers using geolocation and weather (suggesting rain boots when it’s raining in an area). The company is also developing more sophisticated algorithms like Zappos Zero, which suggests clothes and other offerings to pair with a customer’s choice of shoes. 
 
 Zappos, which was bought by Amazon in 2009, has differentiated itself on customer service and company culture. But as that approach has become more mainstream, the company has been faced with the challenge of how to develop a competitive advantage. CEO Tony Hsieh has often said the company plans to move into other areas of customer service, long hinting at a Zappos airline, but it has yet to move beyond shoes and retail. 
 
 Rajan tells Quartz that about 75-80% of the Super Cloud offer-takers are managers. ”The legacy managers who remain in play are the most technical,” he says. As the company moves toward a system without traditional managers, this group of employees no longer filled crucial roles within the company, especially now that the Super Cloud project is expected to be completed this quarter. Rajan tells Quartz that if there weren’t any offer takers, the company would likely have had to lay off some of the managers. 
 
 Rajan’s email to employees on Friday is posted below: 
 
 Super Cloud Teal Offer – Update 
 
 Date : 01/08/16 
 
 There have been a lot of questions about the Super Cloud Teal offer – specifically around how many people took the offer and how we’re going to handle the loss of employees in tech. Quick updates in this context – 
 
 ~50 employees took the Super Cloud teal offer – this is inline with expectations and represents 38% of those who were given the super cloud teal offer, and 3.5% of the total number of employees we had in Q1 2015, which brings the total number of people taking the original teal offer or super cloud teal offer to 260, representing a total of 18% of the company taking the offer and leaving over the 12-month period since Tony’s email in March of 2015 While we have lost a number of folks, it is important to note that we have a significant group of highly talented individuals who will be staying to help move Zappos forward. Additionally, we’ve had the opportunity between April and now to knowledge transfer from those leaving to help mitigate Super Cloud risk. 
 
 We had hoped to complete Super Cloud in 2015 with the help of the Super Cloud Teal Offer – however, we couldn’t get there prior to peak so will complete the project in Q1 16. Having the full team with us in 2015 has positioned us well for the Super Cloud launch in 2016 – we appreciate everyone’s efforts to prepare us for the launch and hope to have Super Cloud behind us by the end of Q1 2016. 
 
 Please let me or the CTO circle know if you have any questions about the above. 
 
 thanks 
 
 Arun ||||| 
 
 Tony Hsieh, chief executive of Zappos, with his autobiography, "Delivering Happiness." Eighteen percent of his employees have taken him up on a buyout offer, according to a recent post on the company's Web site, following the introduction of a radically new approach to management called "holacracy." (Noah Berger/Bloomberg) 
 
 This post has been updated. 
 
 A little less than a year ago, Zappos CEO Tony Hsieh made his employees a deal. If they couldn't get behind the online retailer's radical new management system called "holacracy" -- which doesn't have traditional managers or internal job titles -- he would give them at least three months' severance to leave. By May, the company said about 14 percent of the company, or 210 people, had left. 
 
 And now, the company has updated that number, saying in a recent post on the company's web site that 18 percent of the company, or 260 people, have headed for the exits. In the post, chief operating officer Arun Rajan said the total percentage grew after about 50 employees from a tech group decided to take the company up on its offer. "While we have lost a number of folks, it is important to note that we have a significant group of highly talented individuals who will be staying to help move Zappos forward," Rajan wrote in the post. 
 
 But whether these workers left because they couldn't pledge allegiance to holacracy or because they recognized their jobs were out of favor is unclear. The publication Quartz reports that Rajan said in an interview that the majority of the recent group who left are managers who didn't fill critical roles within a company that no longer has traditional supervisors, as well as that it might have had to do some layoffs if there weren't enough people who took the buyout offer. 
 
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 On Friday morning, the company published an FAQ about its turnover, saying it would not have had layoffs and that people who were traditional managers and "declined to take the offer will have the opportunity to look for other roles in that company. 
 
 The recent post updating employees on the departure includes the sort of obscure lingo that can make the system challenging to learn or even understand. The no-bosses, no-titles concept at Zappos, which has garnered repeat media attention in an attempt to examine how it's all going, replaces the traditional corporate hierarchy with a series of overlapping, self-governing "circles." The post suggests people direct any questions to one of these "circles" rather than an individual, and also discusses the "teal" offer, a reference to Hsieh's goal of reaching a state of "self-management" and "self-organization" advocated in the book Reinventing Organizations. Employees had to read the book to be eligible for the buyout offer. 
 
 The concept of such a voluntary buyout is not a new one for Zappos. He famously offers new employees $2,000 to leave if they realize they're just not that into the company's zany culture. (Amazon CEO Jeff Bezos, who owns The Washington Post, began doing something similar for some of his employees after Amazon acquired Zappos in 2009.) 
 
 Hsieh appears willing to lose employees who aren't a good fit because he sees "self-management" as a strategy, rather than simply an experiment in radically extreme management. In Lillian Cunningham's recent story for The Post about Hsieh and his effort, he described the restructuring as a way to help Zappos expand beyond online shoe and clothing retailing and into new industries. Taking away bosses, he said, is a way to "really just have everyone at Zappos act like an entrepreneur," busting up the bureaucracy that can frustrate and drive out a company's most innovative employees. 
 
 His intention, he told Cunningham, is to make Zappos's customer service the brand hallmark that helps him grow into other industries, much like Virgin's "hip and cool" brand led it beyond music and into other fields. Among the ideas that have been brainstormed: a Zappos hotel, an airline, and "even crazy stuff, like porta-potties." For now, at least, such brainstorming may be happening with fewer people. 
 
 Read also: 
 
 Zappos to employees: Get behind our ‘no bosses’ approach, or leave with severance 
 
 Tony Hsieh got rid of bosses at Zappos — and that’s not even his biggest idea 
 
 Zappos says goodbye to bosses 
 
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– People like to complain about their bosses, but maybe bosses are a necessary evil. Back in 2013, online retailer Zappos announced it was getting rid of managers and job titles in favor of a new work culture that sounds, frankly, a little work cultish. When the change actually came last March, 210 employees promptly left the company. Now, the New York Times reports that number has risen to 260—or 18% of the Zappos workforce. Zappos executive Arun Rajan tells Quartz the majority of the recent deserters were managers. "As the company moves toward a system without traditional managers, this group of employees no longer filled crucial roles within the company," Quartz explains. Rajan says the company would have likely had to lay off some of the managers if they hadn't left voluntarily. The new management system installed by CEO Tony Hsieh is called holacracy and attempts to get rid of the bureaucracy that can hurt employee innovation, the Washington Post reports. According to the Times, many employees were excited to have more freedom within the company, but even Zappos' head of public relations acknowledged the change was "weird." The Post reports some of the innovations being floated under the new management structure include a Zappos airline and Zappos-branded porta-potties. “While we have lost a number of folks, it is important to note that we have a significant group of highly talented individuals who will be staying to help move Zappos forward,” the Times quotes a statement from Rajan. Employees who leave Zappos because of the new system are offered a buyout.