Difficult Decisions in Challenging Times
Recreational Equipment, Inc. (REI), a prominent outdoor retailer, has made the difficult decision to lay off 357 employees, according to a message shared by CEO Eric Artz. The reduction in workforce, announced on Thursday, affects various departments within the company.
The headquarters near Seattle will see a loss of 200 positions, while six employees in sales and customer service, 30 in experiences, and 121 in distribution centers will also be affected. Artz expressed the challenging nature of such decisions and acknowledged the impact on the lives and livelihoods of those affected.
The CEO further explained that the layoffs were primarily driven by financial necessity, pointing out that the roles being eliminated either lacked work or were duplicative.
Support for Employees
Employees whose jobs were eliminated were informed individually by their leaders. They will receive severance packages, continued health coverage, and outplacement support services to aid them in their transition.
REI has also made the decision to forego merit increases for employees at headquarters, including leaders, this year. Additionally, the company plans to reduce the size of its senior leadership team by 22% in 2024 as part of its efforts to navigate the challenging business and industry conditions.
Industry Challenges and Future Plans
Artz addressed the increasingly challenging and highly promotional state of the outdoor specialty retail industry, citing four quarters of decline. Although REI was able to outperform this trend for much of the previous year, the impact caught up to them in Q4. The company expects these difficult conditions to persist throughout 2024.
Interestingly, REI had announced plans to open 10 new stores this year just two weeks prior to the layoff announcement. These new locations aim to better serve members and the outdoor community by offering a variety of apparel, gear, and expertise for various activities, including camping, cycling, running, fitness, hiking, climbing, and full-service bike shops.
Mary-Farrell Tarbox, REI’s Vice President of Stores, expressed excitement about becoming a welcoming resource in these communities with accessible natural spaces and close proximity to iconic national parks. The company also plans to establish nonprofit partnerships to support local efforts in promoting outdoor activities.
Despite the challenges faced by REI and the outdoor retail industry as a whole, the company remains committed to its mission of connecting people with nature and providing the necessary resources for outdoor enthusiasts.
