EXEC: Patagonia Lays Off 41 Employees at Venture HQ in Restructuring

Patagonia is conducting an internal restructuring that resulted in the release yesterday of 41 employees in its Ventura headquarters, representing approximately 1 percent of the workforce.

Patagonia CEO Ryan Gellert said the restructuring aims to “enhance product development, improve customer experiences, and foster a vibrant workplace culture.”

In a LinkedIn post, Gellert noted that the company remains profitable, but the overall business is underperforming expectations. “We are vulnerable to the same economic headwinds many companies in our industry are facing.” He added that the roles are “evolving” given changing market dynamics, with some duties eliminated and others created.

Gellert elaborated, “We are evolving key functions in our Ventura headquarters to re-focus on building the best product, creating authentic connections through storytelling, and generating even more impact through grassroots environmental partnerships and responsible business practices. The changes will also ensure a more connected and consistent customer experience, remove some of the barriers that make it difficult to get our work done, and support a more vibrant culture.”

Despite the changes, Gellert insisted Patagonia’s mission has remained the same: to become “excellent in all ways, starting with our products, and to be a responsible convener and mobilizer for the whole community of those seeking to save our home planet.“

As part of the transition, affected employees will receive at least 22 weeks’ pay, increasing with tenure, financial support for health insurance for a year, and career transition assistance.

The layoffs come two years after Yvon Chouinard, who founded the company in 1973, transferred ownership to a specially designed trust and a nonprofit organization to ensure Patagonia would retain its independence and funnel all profits to combat climate change.

The company’s largest share, 98 percent of Patagonia’s stock, went to the Holdfast Collective, a nonprofit tasked with helping protect nature and the climate. The rest went to a newly created Patagonia Purpose Trust, which holds all voting power in the company and provides a legal structure to keep the company’s values in place.

Gellert was appointed Patagonia’s CEO in September 2020 after leading the brand’s European operations for six years.

Gellert’s full memo reads as follows:

Many people have asked me how Patagonia has changed since its founders, the Chouinards, transferred their stock to the Patagonia Purpose Trust and the Holdfast Collective two years ago. My answer is: Not much. We are part of a radical experiment that, for 51 years, has consistently demonstrated that business can be done differently and more responsibly. That is who we have been since Yvon founded the company, who we are today, and who we will be tomorrow.

Our success and our impact rely on our business. And our business relies on our commitment to quality product and authentic storytelling in service of our community. Today, we are getting more right than wrong, but we aren’t meeting the high standards we set for ourselves. And while we remain profitable, we are vulnerable to the same economic headwinds many companies in our industry are facing.

Meeting our own standards requires embracing change and focus, and this week begins some major internal changes that are critical for our success in the near term and foundationally important for our next 50 years. We are evolving key functions in our Ventura headquarters to re-focus on building the best product, creating authentic connections through storytelling, and generating even more impact through grassroots environmental partnerships and responsible business practices. The changes will also ensure a more connected and consistent customer experience, remove some of the barriers that make it difficult to get our work done, and support a more vibrant culture.

Throughout this process, we evaluated roles, not people, and made every effort to minimize the impact on our colleagues. New roles were created, some were eliminated and most roles in Ventura are evolving. We bet on our own talent and are filling most of the new roles with internal candidates rather than searching externally. But even still, we had to make the sad and difficult decision to say goodbye to 41 of our colleagues, about 1% of our workforce.

We are grateful to each of them, and I want to be clear that this decision does not represent a failure of people or roles. It means some parts of our company need to be shaped differently from the setup that made us successful in the past. We had individual conversations with them and are committed to a smooth and caring transition. They will receive a minimum of 22 weeks of pay, increasing with tenure, to support their transition, along with financial support to cover health insurance costs for a year and career transition assistance. And LinkedIn community – if you are hiring, reach out to me and I’ll help you get in touch with these exceptional individuals.

We’re aware that our reputation is something we must earn and invest in each and every day. Patagonia has always been a great company; our challenge now is to become excellent in all ways, starting with our products, and to be a responsible convener and mobilizer for the whole community of those seeking to save our home planet.

Image courtesy Patagonia