News broke Tuesday that Downtown Project, the Downtown Las Vegas revitalization initiative largely funded by Zappos CEO Tony Hsieh, had laid off 30 employees from its “corporate support staff.”
The news brought a flurry of responses—gloating comments, mournful sentiments and apocalyptic predictions for the future of Downtown. Sources familiar with DTP expressed frustration with the project’s leadership, one source telling the Weekly, “People are asleep at the wheel. Everyone's waiting for the shoe to drop at this point. And it could all be saved."
DTP issued a statement this afternoon, but conspicuously missing was a response from Hsieh himself. Tonight the Zappos CEO published that statement on the Downtown Project website, addressing DTP’s status, its future plans and reports that he stepped down as the project’s CEO or leader.
“I’ve never referred to myself as the CEO of Downtown Project, and I’ve never considered myself as being in ‘day-to-day management’ of Downtown Project,” Hsieh wrote. “My role continues to be as an investor, advisor and equivalent of a board member that sets high-level general direction and strategy but is not involved in day-to-day management of people or projects. My level of involvement at Downtown Project is the same as it was six months ago.”
Hsieh called today’s layoffs “a restructuring and refocusing,” adding that DTP directly employs more than 300 people and has contributed to the creation of more than 800 jobs through its investments in Downtown Vegas. The DTP website lists the official count at 863. “Later this week we are adding about 30 positions when we open up the Market, and we plan to continue to grow our total job count,” Hsieh wrote.
His statement goes on to outline DTP’s five-year plan, based on Hsieh’s experience with Zappos, noting, “we believed that we could get to cash flow positive status within five years for Downtown Project,” and that so far, DTP is moving at “roughly twice the speed of Zappos in the early days.”
The DTP five-year plan:
Year 1 – 2012: acquire/assemble land and start making tech, small business and other investments
Year 2 – 2013: fund/experiment – fire a lot of “bullets” (make a lot of investments) in a lot of different areas, and see which ones hit
Year 3 – 2014: focus on optimizing core while finding the top winners to pick as “cannonballs” to double down our bets on (in terms of additional follow-on investments, resources and time) while streamlining our other operations
Year 4 – 2015: continue to streamline and scale operations
Year 5 – 2016: – get to cash-flow positive/sustainability
“[J]ust like any startup,” Hsieh wrote, “[DTP] has gone through the same range of ups and downs that we went through at Zappos—just twice as quickly, so therefore the highs and lows can oftentimes appear to be twice as intense.”
Today, that low was felt intensely in Downtown Vegas, with questions lingering about the future of some DTP investments and projects still in their early stages.
Hsieh directly addressed two DTP-owned businesses: The Perch restaurant at Container Park, which opened to the public last week and will be unaffected by today’s restructuring, and the Market, the grocery store also slated to open next week as previously planned at 611 Fremont Street.
Hsieh also shared a document listing his “DTP priorities” (as well as elements of the project in which he is not a decision-maker), including tech investments Zirtual, Digital Royalty, OrderWithMe, Moveline, Flint & Tinder and Shift; Life Is Beautiful Festival; 9th Bridge School; Turntable Health; and “collisions research/strategy.”