REI to cut wages for new employees, reduce benefits for current employees

Drama with unionized workforce continues as the outdoor retailer retools its image and branding with Peak 28 program

Outdoor retail giant REI Co-op announced to employees in a February email the company was planning on reducing starting pay for employees at retail stores, distribution centers and its headquarters beginning July 1, plus reduce benefits for all current employees.

As first reported by Josh Eidelson at Bloomberg on March 11, Bloomberg was able to view the email sent by CEO Mary Beth Laughton in February, who stated in part about the cuts, “effective July 1, 2026, the salary range will be reduced, which results in a lower starting hourly rate for new employees hired as of that date,” according to Bloomberg.

The pay cut percentage was not disclosed, according to Bloomberg’s reporting, however the average starting pay for REI store employees is between $15 – $20/hour depending on store location and state. The starting wage range for a Sales Specialist at the Denver, Colorado store is between $19.29 – $21.51/hour.

According to Bloomberg, the email from Laughton also said, for existing employees the company’s, guaranteed retirement contribution will now follow a more traditional “company-match” model, including vacation time accruing at a lower rate and sick time moving from a standard store policy to one aligning, with accrual requirements following state-by-state policies.

“We’re still spending more than we bring in and expect continued economic pressure this year,” Laughton said in the email. “While we’ve taken significant steps already to manage costs, we’re still on the climb toward a healthy financial position.”

The email appears to be another indication the outdoor retailer has been under more financial pressure, pressure that includes disputes and drama with its two unions it works with.

According to a May 2025 press release, REI reported $3.53 billion in revenue for 2024, which was a 6.2% decrease from the prior year, and a net loss of $156 million. REI also announced last year it was shutting down its decades-old travel, tour and classes division as part of an effort to return to profitability.

According to Bloomberg, escalating tensions between REI and the United Food & Commercial Workers (UFCW) union and the Retail, Wholesale and Department Store Union (RWDSU) – two unions who have organized unions at 11 of REI’s roughly 200 stores, and have been in negotiations over the last four years – have resulted in 25 tentative-agreements reached over months of negotiations, but none of those stores had secured a final collective bargaining agreement.

According to a March 11 news release from the REI union (UFCW), the situation between the union and REI rapidly deteriorated in late February.

The news release said REI’s attorney notified the UFCW that the two sides were at an “impasse” and as a result, REI announced it would unilaterally implement the terms of its final contract offer, including the controversial pay and benefits cuts.

“REI workers bargained for months, but in the end, the co-op stuck to its anti-union core,” UFCW International President Milton Jones said in the news release. “All workers deserve to have stable working conditions and wages that allow them to live their lives. REI has an opportunity to come back to the table – they must take it.”

According to Bloomberg, union representatives fiercely disputed this claim, with UFCW representative Matthew Horn saying that no impasse existed and that imposing these terms unilaterally violates labor laws.

REI responded to the union’s allegations.

“REI Co-op cares deeply about our employees,” said in a statement. “Over the past nearly four years, we’ve approached collective bargaining with care, consistency, and respect for the process, with the goal of reaching agreements that support our teams and ensure the long-term health of the co-op. This includes working with union representatives to move from 11 separate bargaining tables to a single national structure to create greater clarity and momentum toward 11 store level agreements.”

REI employees also weighed in on the negotiations, saying in part, REI was taking away earned personal time for them to use outside of work.

“Among many others, they cut our retirement, our health care, our vacation days, holiday pay for part-time workers, plus the personal and unpaid time we’ve always set aside to go outside and return with real experience that we could pass on to our members,” REI Bellingham, Washington worker Alex Pollitt said in the statement. “It’s like they think the outdoors are only for the people who can afford it.”

REI has or will be closing three retail stores in 2026 – one in Paramus, New Jersey (closed Jan. 8), one in New York City’s SoHo neighborhood and one in Boston, Massachusetts – none of the 11 locations in Colorado are affected by this action.

The closing’s on the East Coast are part of the company’s “Peak 28” transformation program; a comprehensive three-year strategy to rebuild REI’s place in the outdoor retail space. The Peak 28 strategy is built on elevating the company’s culture, refining product assortments, enhancing service, and reinventing the membership program, according to a September 2025 statement from REI.

“Making these shifts will not be easy; they’ll require us to fundamentally transform, make difficult choices and evolve the way we work over the next few years,” Laughton said in the 2025 statement. “We know this plan is ambitious, but we also know it’s possible. And it’s crucial, because this plan is not about getting back to what the co-op used to be. It’s about climbing the challenging peak that’s in front of us, putting the co-op on more solid footing and building our capabilities to climb the next peaks that are even higher, together.”

REI is slated to report 2025 financial earnings later in spring 2026, which could give better optics about how the company is doing heading into 2026.