REI lays off hundreds, says it expects tough year ahead

REI is laying off 357 employees as the company braces for a challenging year, CEO Eric Artz told employees on Thursday.

The cuts represent 2.2% of REI’s total workforce. According to the memo, layoffs will affect 200 headquarters employees, six from sales and customer support, 30 from teams that support classes and multiday trips, and 121 in distribution centers.

In Washington, the layoffs will affect 175 employees, representing 6.4% of the total workforce in the state, according to REI.

Employees who work in the Seattle-founded company’s stores will not be affected.

Even though REI no longer has a single location for its headquarters since 2020, it has a headquarters division in satellite offices spread across the Seattle area, according to the co-op.

The company is expecting this year’s revenue to be down compared to 2023, a difficult year that saw outdoor specialty retail sales decline. The industry, Artz said, has become more challenging.

In anticipation of lower revenues, “we must adjust our plans and cost structure accordingly,” Artz said.

A laid-off employee, who asked to remain anonymous to protect future job prospects, said she has known about upcoming layoffs since last month, when, at an all-hands meeting, Artz said layoffs would likely come. 

This morning, Artz had a meeting with employees about the state of the company, and at 9 a.m. the employee was told she was being laid off.

The employee said the company allowed her to keep her email access to say goodbye to colleagues. “I really enjoyed working there,” the employee said, “so I was really sad to be laid off today.”

The affected workers are not unionized and can’t negotiate over their layoff and severance, UFCW 3000 spokesperson Ben Reynolds said via email. The union is made up of about 550 workers at eight stores that have won elections, Reynolds said.

Reynolds noted that, while workers are losing their jobs today, REI is spending money opening at least 10 new stores this year.

The layoffs were primarily driven by financial necessity, Artz said. But the company also “took a strategic approach to evaluating team structures against business needs.”

“While many decisions were based on work that no longer exists, we also focused on reducing duplicative work, layers and hierarchy to build more efficient and connected teams,” Artz said in the memo.

REI last announced layoffs in October, when it cut 257 retail jobs, including 19 in Washington, in a bid to restructure its brick-and-mortar stores.