Outdoor recreation retailer REI is cutting its workforce for the third time in less than 12 months.
In a Thursday announcement from CEO Eric Artz that was shared with employees, the executive said 357 people will be laid off — 200 employees at its Sumner, Washington, headquarters, 121 in distribution centers and 36 in other roles, including experiences. Non-headquarters store-specific roles are not affected by the layoffs, the company said.
Those being let go were notified in one-on-one conversations on Thursday, REI said. Employees whose jobs were cut will receive separation benefits that include severance, continuation of health coverage, and outplacement support and services.
Last February, REI laid off 167 people at its corporate headquarters as part of a restructuring. In October, the outdoor retailer cut 275 people in a store operations overhaul. REI has about 16,000 employees and about 180 locations in the U.S., according to its website.
In addition to this round of job cuts, Artz said the company will pursue additional cost-cutting measures this year. They include not funding merit increases for headquarters employees, including for leaders, this year. REI also said it will not backfill recently vacated leadership positions and it will reduce the size of its senior leadership team by 22% this year.
Artz said this week’s decisions were driven by financial necessity and that the company wants to reduce duplication of work and build more efficient, connected teams. Outdoor specialty retail has seen four quarters of decline, Artz said, negatively impacting REI. The industry remains challenging and promotional, and will likely remain in that state throughout this year.
“As a result, we are planning this year’s revenue to be down from 2023, reflecting the macroeconomic conditions we are expecting for 2024,” Artz said. “When we plan our revenues down, we must adjust our plans and cost structure accordingly. We must also continue our work to return REI to profitability to set the co-op up for long-term health and success.”
REI, which operates as a cooperative with about 23 million members, has not yet announced its 2023 revenue. However, the retailer said it achieved $3.9 billion in sales in 2022 and swung to a nearly $165 million loss. It also invested $50 million toward pay raises for hourly employees and another $92 million toward retirement and bonuses that year.
