REI Co-op plans to reduce its pay rates for future employees and scale back benefits for current employees to shore up profitability, according to Bloomberg.  Union organizers issued statements claiming the moves are tied to REI’s decision to halt negotiations on a collective bargaining agreement, although REI strongly denied those accusations.

Bloomberg attained an internal memo sent out by REI in February that stated, “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 Glassdoor, the starting salary range for a sales associate at REI has been $15 to $20 per hour.

In a separate message REI released last month and also obtained by Bloomberg, the company’s CEO Mary Beth Laughton since February 2025, announced to employees that the co-op would make “a few focused changes” to workers’ benefits, including slowing vacation time accrual, switching from guaranteed retirement contributions to a more traditional company match model and changing sick days from an across-the-board policy to one that aligns state-by-state with what is legally required.

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

REI declined to comment further to Bloomberg and declined to elaborate to SGB Executive.

Laughton, who previously headed Nike’s global direct-to-consumer business and earlier led Athleta, is orchestrating restructuring moves at REI after the retailer reported that sales declined 6.2 percent in 2024 to $3.53 billion, after sliding 2.4 percent in 2023, while showing losses in both years. The loss was $156.4 million in 2024, compared to $311.1 million in 2023.

Among other moves, last October, REI confirmed it planned to close its Paramus, NJ, store in the first quarter of 2026, as well as its only store in Boston and its flagship in the SoHo neighborhood of Manhattan in late 2026.

In September last year, REI introduced “Peak 28: Ascending Together,” a three-year “transformation strategy” calling for a “commitment to building trust, product leadership, elevated service, and a revamped membership program.” The plan is “designed to help the co-op get back to growth,” Laughton said in a memo at the time.

In January 2025, REI announced it was closing its “Experiences” division, which included adventure travel, classes and events. The move led to the lay off of 428 employees.

REI also continues to face pressure from union organizers.

In this year’s February memo, Laughton said the benefit reductions would apply throughout REI’s stores, including unionized locations. The benefit updates, she indicated, were also being included in a final contract offer REI was making for its unionized locations.

As of early 2026, 11 of REI’s roughly 195 stores have unionized, represented by the United Food and Commercial Workers (UFCW) and the Retail, Wholesale and Department Store Union (RWDSU). None of the stores has reached a collective bargaining agreement in the four years since the first one organized at REI’s SoHo flagship location in Manhattan.

Unions Charge “Bad-Faith Bargaining”
On Wednesday, the UFCW, RWDSU and REI Union, a coalition of REI’s unionized workers, issued statements indicating that they had held a press conference on Wednesday attended by unionized employees, union organizers and local officials in Seattle, REI’s hometown, to charge that REI had “made the decision to illegally declare impasse, walk away from negotiations and unilaterally implement wage cuts for REI union workers.”

The statement claimed REI’s apparent decision to declare a bargaining impasse came despite reaching 25 tentative agreements over the last four years. The group called the reductions in employee benefits packages “a key marker of bad-faith bargaining” and the halt of negotiations as “vehemently anti-union actions.”

Alex Pollitt, a worker at REI’s store in Bellingham, WA, said, “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. It’s like they think the outdoors are only for the people who can afford it.”

REI SoHo worker Claire Chang said, “We won our union election four years ago because we wanted a way to hold our employer accountable for their decisions and actions, to take care of one another, and to have respect and dignity at our workplace. We wanted this co-op to live up to its values. Since then, REI has tried many different aggressive tactics in an attempt to break our spirits and break our union. But it hasn’t worked. In fact, we’ve only grown in number and are more united and determined than ever before.”

King County Executive Girmay Zahilay in Washington said, “More than a year ago, I stood with workers outside REI’s Issaquah headquarters and my message remains the same: Every worker deserves an employer who will come to the table and bargain in good faith. I know REI can rise to this moment, lean into its values and come back to the table to reach a fair deal.”

“REI workers bargained for months, but in the end, the co-op stuck to its anti-union core,” said UFCW International President Milton Jones. “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.” 

 “REI’s attempt to paint itself as a progressive, values-based co-op is a total illusion so long as they continue to treat their own employees with such blatant disrespect,” said Stuart Appelbaum, President of the Retail, Wholesale and Department Store Union (RWDSU). “By falsely declaring an impasse and walking away from the table, REI has moved beyond mere stalling and gone right back into an active, multi-yearslong campaign of union-busting. REI workers have reached 25 tentative agreements in good faith, yet management would rather break the law than provide a fair, equitable contract. REI must stop these anti-union theatrics and return to the bargaining table immediately.” 

Last May, the union took credit for a drive that led REI members to fail to elect three board members, including two incumbents whom the retailer had nominated ahead of its annual meeting. REI had drawn criticism for its decision to block two union-backed candidates from the ballot, its approach to unionization efforts, and its initial endorsement of Trump’s Secretary of the Interior, which was retracted in April after backlash from members.

REI Responds to Union’s Accusations
REI later issued a response to the union’s charges. The statement follows:

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“REI Co-op cares deeply about our employees. 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. 

“We strongly disagree with the union’s characterization of recent events. At every step, our focus has been on reaching agreements that are fair, sustainable, and in the best interest of our employees and the co-op. REI did not act illegally, nor did we walk away from negotiations. We have shown up consistently, constructively, and in good faith, putting forward proposals focused on competitive pay and benefits.  

“After extensive, good faith bargaining and prolonged discussions on both sides, REI presented its last, best, and final offer, which is designed to support our employees while protecting the future strength of the co-op. While we did not ultimately reach agreement and the parties are at impasse, a lawful determination under federal labor law, it was not due to a lack of effort, care, or respect for the bargaining process or for our employees.    

“We remain open and willing to return to the bargaining table and continue to believe that productive dialogue is the best path forward.”

Image courtesy REI