CEO Tony Hsieh announced on Wednesday that the company will be handing it's Kentucky operations over to it's parent company

This decision is a result of the company's focus on downtown Las Vegas redevelopment efforts and it's impending move of 1,300 workers from Henderson into the former City Hall building.

Zappos has two warehouses in Kentucky that it had expected to soon outgrow. Rather than buy another warehouse, the company decided to fold it's distribution facilities into Amazon's existing network.

Amazon acquired Zappos in 2009. Zappos will retain control of it's 6pm outlet store in Kentucky.

Hsieh said about 2,000 Zappos employees will by September transfer to Amazon, a move which comes with a 5 percent average bump in overall compensation.

Though the changes are happening far from Las Vegas, they will have big ramifications for the company's headquarters city. "This allows us to focus more on what we are doing for our campus relocation."

The company will now enlist the help of Craig Adkins, who was overseeing the Kentucky operations, for downtown redevelopment efforts. Adkins will contribute his warehouse and logistics knowledge to startups with the Downtown Project, a Zappos related revitalization group led by Hsieh.

Zappos is adding a photo studio to its downtown headquarters for product and clothing photo shoots. The studio is an expansion.

"This is all part of our strategic plan for Zappos to help transform downtown Las Vegas as a hub for entrepreneurs."

Shedding it's Kentucky operations does not mean that Zappos will be giving over the rest of business to Amazon. Operations in Las Vegas and San Francisco will be run independently of the online Amazon.

"This is driven by the fact that Amazon is extremely excited about our efforts to revitalize downtown Las Vegas and set the stage to ultimately bring more technology and innovation to the Vegas community, which will only help Zappos in the long run."