JANUARY 25, 2024 — 357 EMPLOYEES
CEO Eric Artz announced Thursday the company is laying off 357 employees as it braces for what's expected to be a "challenging" year ahead.
Team,
I have difficult news to share today that will impact each of you in some way. I want to start with the difficult part first, and then I’ll share more about why, how we got here, and a bit about how we’ll move forward.
Today we will reduce our total workforce by 357 people, impacting 200 people at headquarters, 6 in S&CS, 30 in Experiences and 121 in our distribution centers. No non-HQ store-specific roles are impacted. I am sharing these details with you this morning, so that you have a clear picture of what will happen today and in the days to come. Decisions like these—with real impacts to people’s lives and livelihoods—are the most difficult that I must make as your CEO.
The coming days are going to be tough as we let go of a lot of good people. We’re going to do everything we can to support them, but that will not make this moment any easier. Each of you will have a lot to process, whether you are leaving the co-op or staying. Our priority today is to have the necessary conversations with colleagues we are saying goodbye to, and we will create more time in the coming days to discuss how we move forward.
While this work was primarily driven by financial necessity, we took a strategic approach to evaluating team structures against business needs to ensure consistency across the organization as leaders made decisions about which roles to eliminate. 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.
In addition to today’s reduction in force, I am announcing the following actions:
While 2023 results are not yet final, we believe we will achieve a payout just above the enterprise threshold for the 2023 Summit Incentive Plan for headquarters, Experiences and Sales & Customer Support. The summit results for stores and distribution centers will continue to be calculated separately based on their individual plans. Assuming no material changes to the preliminary results, all Summit-eligible departing employees would also receive a 2023 Summit payout upon final approval.
We will not fund merit increases for headquarters (including leaders) in 2024. Some teams will remain eligible for 2024 merit: store teams and managers, DC teams and managers, S&CS teams and managers and non-HQ Experiences teams and managers.
We will not backfill recent leadership departures as we take the opportunity to right-size our senior leadership team to the needs of our business. Altogether, we are reducing the size of our senior leadership team by 22 percent for 2024.
How we got here
As you know, the state of the business—and our industry—has become increasingly challenging and highly promotional. As I shared in my most recent CEO Huddle, while the U.S. as a whole has avoided entering a recession (by definition, two consecutive quarters of total U.S. market decline), outdoor specialty retail has experienced four quarters of decline—and that trend has been worsening. 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.
As a result, we are planning this year’s revenue to be down from 2023, reflecting the macroeconomic conditions we are expecting for 2024. 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.
As a cooperative, we have both the privilege and the deep responsibility to think longer term, about generations, not just quarters. We can—and must—get through this moment because the world needs a healthy REI. 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.
The year ahead will require us to make strategic and intentional choices to control the things that we can. Many of these choices will be difficult. And they are what we must do to ensure the co-op is healthy for the long-term.
Where we go from here
Our work is important, and REI makes the world better. We will talk more about what the path forward looks like over the coming days and weeks, but the next 24 hours are about supporting people. Today, I simply ask that you take care of yourselves and each other. Remember that we have resources, like the Employee Assistance Program, to support you as well.
Continue to move with care and compassion as you always do. And know that I am deeply grateful for each one of you. I’ll be back to share more about how we move forward in a few days.
Eric
OCTOBER 14, 2023 — ANOTHER 275 EMPLOYEES
In another round of layoffs, REI Co-op laid off about 275 store employees, primarily those employees in the sales lead role in retail operations.
Mary-Farrell Tarbox, vice president of stores for REI, noted, “This is not something we take lightly – these actions are necessary to set us up for long-term success. We cannot build a best-in-class employee experience while we currently have more than 180 different employee experiences.”
The layoffs will allow REI the flexibility needed to support our business, provide enhanced hours predictability for most staff, improve accountability at all levels, and ensure we’re investing the right number of hours into the right roles.
“There are many areas that are out of date and no longer serving our employees or REI’s mission and business,” she wrote. “We have no consistent model for store structure with outdated volume bands and a different staffing model in nearly every store. This lack of clarity leaves us with inconsistent accountability measures for store leaders and teams and no standard operating procedures across stores.”
FEBRUARY 1, 2023 — 167 HEADQUARTERS EMPLOYEES WERE LAID OFF
REI announced that the total number of people being dismissed is 167, or 8% of its corporate workforce.
President & Chief Executive Officer, REI Co-Op, Eric Artz…
Earlier this month I shared an update on the state of our business and the broader economic conditions we foresee in the year ahead. We have clear goals for the future of the co-op and are confident in our long-term strategies. But in the face of increasing uncertainty, we need to sharpen our focus on the most critical investments and areas of work to best serve our members and grow the co-op over the long term. We will need to make hard choices, and that will be the work ahead for all of us.
Together, we are stewards of something truly special—this 85-year-old cooperative, its legacy, and its future impact. We are all here because we believe that time outside is fundamental to a life well-lived. The decisions we make today will determine the co-op’s ability to live up to our mission—to connect every person to the power of the outdoors and engage them in the fight to protect it—for generations to come.
To ensure that future impact, it is vital that we get the co-op back to profitability as quickly as possible. I know we can get there, but it will require each of us to work very differently. In the year ahead, we will align around a few vital strategic priorities to ensure we are making the best use of the co-op's resources to serve members, customers, and support our long-term impact goals. This also means centering our work around the customer and member experience.
This week we made organizational changes at our headquarters to focus resources on areas of highest impact. These changes include: Strategically reorganizing and combining several headquarters divisions so that teams are organized around a focused set of priorities. And, reducing the size of our overall headquarters team to align the co-op’s resources and people to the areas of highest impact. This change impacts 167 leaders and employees, approximately 8% of our HQ workforce and less than 1% of our total workforce.
This news has a very real impact on people we care deeply about, and this period will be difficult.
The Co-op Way reminds us that we go further, together. But in the moments when we fall short of our goals, I own the very tough decisions about how we move forward. Next week, I will go more in depth on our 2023 plan and goals for the year. For now, thank you for caring for one another with compassion, kindness and appreciation.
AUGUST 12, 2020 — REI WANTS TO SELL ITS FANCY NEW HEADQUARTERS BUILDING AND CONTINUE ITS WORK-AT-HOME OPERATIONS.
The company appears to be seeking a buyer for their beautiful custom-built headquarters before occupying the building.
According to the company, the pandemic is credited with stress-testing the work-at-home model which does not require such a large physical footprint. The sale would also provide needed cash to survive the ongoing recreation and travel limitations.
The cost savings from work-at-home policies have proved to be extremely welcome in cash-strapped companies.
JULY 23, 2020 — Original post…
Kent, Washington-based Recreational Equipment (REI), a retailer of outdoor gear and destination programs, has announced a reduction in force among its retail outlets. Approximately 400 retail employees nationwide.
This is the second major layoff, the first being a layoff of 300 headquarters employees in April 2020.
According to a company spokesperson, "Nearly all REI stores are open in some capacity with a focus on health and safety standards for employees and customers, and we’ve been able to bring the majority of those employees back from furlough. This week we notified approximately 400 retail employees (less than 5% of our retail staff) that they will not be brought back when the furlough period ends on July 15.”
Moreover, the company intends to relocate its headquarters from Kent, Washington to larger quarters in Bellevue, Washington about 20 miles away.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. We see good people being laid off through no fault of their own. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?
