REI Announces Job Cuts: Approximately 357 Employees to be Affected, Including 200 from Corporate Headquarters
In an unexpected turn, outdoor recreation giant REI announces another round of layoffs for the third time within a year.
In a candid correspondence to its employees, REI's CEO Eric Artz revealed that 357 employees bearing the brunt of the latest rounds will include 200 from the headquarters in Sumner, Washington, 121 from distribution centers, and 36 from varying roles, encompassing experiences. Rest assured, non-headquarters store-specific roles will remain unaffected, the company assures.
On Thursday, the affected employees received the distressing news through private consultations, as per REI's statement. As a show of support during these challenging times, the company offers departure packages consisting of severance, extended health coverage, and outplacement assistance and services to aid in their career transitions.
Last February, REI initiated the first wave of layoffs, targeting employees at its corporate headquarters. In October, the outdoor retailer underwent further restructuring, trimming its workforce by a staggering 275 people, marking a challenging phase for the company. REI's employee count currently stands at approximately 16,000 employees across its 180 store locations nationwide.
In addition to this recent round of job losses, Artz outlined additional cost-saving measures for 2023. These include forgoing competitive raises for headquarters staff, including leaders, this year. The company also expressed the decision to leave vacant senior leadership positions unfilled and plans to shrink its senior leadership team by 22%.
The necessity of streamlining operations and reducing duplicated tasks to foster a more efficient and interconnected workforce, according to Artz, has driven this week's decisions. With outdoor specialty retail experiencing four consecutive quarters of decline, Artz admits, this unfavorable trend is impairing REI's growth. The industry, he observes, still faces an entrenched state of promotional challenges expected to persist throughout the year.
To meet the economic expectations for 2024, Artz disclosed that REI plans to scale back its projected revenue for 2024 and adjust its operating expenses accordingly. "We must continue our pursuit for REI’s return to profitability to fortify the co-op for long-term durability and prosperity," Artz emphasized.
Despite not officially announcing its 2023 revenue, REI reports significant success in hitting $3.9 billion in sales in 2022. However, this triumph was shadowed by a nearly $165 million loss, prompting substantial investments in pay raises for hourly employees and bonuses amounting to $142 million.
As a cooperative with around 23 million members, REI demonstrates an unwavering commitment to its community. In 2022, it set aside $50 million for employee salary increases and devoted additional resources to bolster employee retirement plans.
- ERIC Artz, REI's CEO, revealed that 357 employees will be affected by the latest round of layoffs, including 36 from various roles across the organization.
- The layoffs will impact 200 employees from REI's headquarters in Sumner, Washington, 121 from distribution centers, and 36 from different roles.
- In an effort to support affected employees during this challenging time, REI offers departure packages, which include severance, extended health coverage, and outplacement assistance and services.
- The outdoor recreation giant has faced a tough year, with three rounds of layoffs, targeting employees at its headquarters and distribution centers.
- To streamline operations and reduce duplicated tasks, REI plans to forgo competitive raises for headquarters staff, including leaders, and leave senior leadership positions unfilled, resulting in a shrunken senior leadership team of 22%.
- Despite reporting $3.9 billion in sales in 2022, REI faced a nearly $165 million loss, prompting substantial investments in pay raises for hourly employees and bonuses amounting to $142 million.
