REI laid off seven employees recently as part of a reorganization caused by an “evolving business strategy” in its experiences division, a company spokesperson confirmed to Retail Dive on Friday. The impacted team members received severance, COBRA health insurance and outplacement support.
The job cuts come about six months after the outdoor retailer laid off 357 employees, including 200 at its corporate headquarters. Those layoffs also impacted 121 employees in distribution centers and 36 in other roles, including experiences.
While REI’s most recent layoffs are small in number, they’re the latest in a string of layoffs that goes back to last year. In January 2023, the outdoor retailer announced it would lay off 167 employees at its corporate headquarters, followed by 275 store employees in October that year as part of an operations overhaul.
In explaining the layoffs, CEO Eric Artz has multiple times referenced the need for REI to return to profitability and cited the difficult macroeconomic environment. In 2022, REI swung into the red for the year, racking up a $164.7 million net loss despite record sales of $3.9 billion.
The outdoors category as a whole, which boomed during the pandemic as people looked to avoid spending time in confined indoor spaces, has since struggled. Dick’s Sporting Goods, which acquired Moosejaw from Walmart in 2023 and shuttered the majority of its stores later that year, has also recently cited negative trends in the space impacting its Moosejaw and Public Lands businesses.
“The pandemic structurally increased outdoor participation levels across a wide variety of activities and categories here in the U.S. But top-line revenue growth has since waned, bringing back the low-growth paradigm that has more typically defined the outdoor industry,” a recent report from BCE Consulting asserted.
The consulting firm noted the need for new growth strategies in the industry, including embracing traditional fashion, broadening the pool of potential customers and leaning into emotional connections in marketing rather than touting performance features.
Despite REI’s challenges as of late, the company is still pursuing growth opportunities, including 10 new stores set to open in 2024 and the launch of its first nongendered apparel collection for adults.
