REI is the latest company to announce significant workforce reductions this year.
CEO Eric Artz notified employees in a Jan. 25 letter that the outdoor retailer would lay off 357 people across its organization, including 200 corporate employees at its Sumner, Wash. headquarters and 121 in its distribution centers.
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The news follows Nike’s December announcement to “streamline” its organization and cut costs, partly via layoffs. Google and Amazon have also announced fresh job cuts for 2024.
In announcing the layoffs, Artz described an “increasingly challenging” state of REI’s business and the outdoor industry at large and said he expects these challenges to persist this year. He projects 2024 revenues to be down compared to 2023.
“As you know, the state of the business — and our industry — has become increasingly challenging and highly promotional,” Artz wrote, adding that the outdoor specialty retail channel has been in decline for four quarters. “While we were able to outperform this trend for much of the last year, it caught up to us in Q4 and we now expect conditions to remain very challenging throughout 2024.”
The job cuts, Artz said, were “primarily driven by financial necessity” as the company looks to eliminate redundancies in its organizational structure. Artz said REI would share plans regarding the future of its work structure in a town hall meeting early next week.
While no store-specific roles were impacted by the cuts, REI stores across the country have recently been at odds with leadership as they gain momentum in a widespread union organizing drive. Several stores have already voted to unionize their stores and workers have filed dozens of unfair labor practice charges against REI with the National Labor Relations Board.
As for its plans in 2024, Artz said REI will not fund “merit increases” for headquarters employees in 2024, though store and distribution center teams and managers and other non corporate roles will still be eligible for them. Artz also said REI will not backfill open leadership roles and it looks to “right-size our senior leadership team to the needs of our business.” Overall, REI’s senior leadership team will be reduced by 22 percent for 2024.
“We can — and must — get through this moment because the world needs a healthy REI,” Artz said. “We understand time outside is fundamental to a better life, a life well lived. Our mission is to help more people get outside and to create equitable access for everyone to spend more time outside. We also know there is no mission without margin. Running a healthy, profitable business fuels our mission and the collective positive impact we aspire to create in the world.”
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