Seattle-based outdoor specialty retailer REI Co-op has confirmed the implementation of layoffs affecting hundreds of employees, as revealed by CEO Eric Artz. Artz highlighted expectations of a “very challenging” 2024, citing a “highly promotional” environment in the outdoor retail sector.

The layoffs involve a total of 357 workers distributed across various departments. Notably, 200 employees from the headquarters, six from sales and customer support, 30 from the experiences department, and 121 from distribution centers are affected, constituting 2.2 percent of REI’s overall workforce. The company clarified that store-specific roles remain unaffected by these workforce reductions.

In a letter addressed to all employees, Artz emphasized that the layoffs were primarily driven by financial necessity. The decision-making process involved a strategic evaluation of team structures aligned with business needs to ensure organizational consistency.

Artz pointed out the challenging and highly promotional environment, noting that although the U.S. has avoided a recession, the outdoor specialty retail sector has witnessed four consecutive quarters of decline, with the trend exacerbating. Despite outperforming this trend for a significant part of the previous year, challenges surfaced in the fourth quarter, leading to the anticipation of continued difficulties throughout 2024. Consequently, REI expects its 2024 revenue to decrease compared to 2023.

Artz underscored the need to adjust plans and cost structures in response to the revised revenue expectations. The company remains committed to the ongoing effort to return REI to profitability, aiming to establish the co-op for long-term health and success.

This announcement follows layoffs in October 2023, when approximately 275 store workers were affected, including the elimination of the sales lead role across all retail operations. This move followed an earlier reduction of about 8 percent of headquarters staff, totaling 167 workers, in February.

Notably, this announcement comes shortly after REI revealed plans to open 10 new stores in 2024, with two additional openings announced for 2025. Artz mentioned that the company would share an overview of its go-forward plan in the upcoming week, providing insights into major updates related to work and projects.