REI Co-op confirmed its revenue declined in 2023 in a financial recap of a year that saw the outdoor retailer shed hundreds of employees in response to a challenging environment.

REI reported a 2023 net loss of $311 million, widened from a net loss of $164.71 million in 2022. The company said the net loss was the result of increased hourly pay, member rewards, and a $169 million non-cash valuation allowance. The year marks its second consecutive annual net loss

The company generated revenue of $3.76 billion, down 2.4% from the previous year, in a decline the retailer had warned of in January when it made cuts to its workforce.

“2023 was a year of both growth and challenges for REI,” President and CEO Eric Artz said in a statement Tuesday.

REI Discounts, Layoffs

Heavy promotions and other operating challenges have driven multiple rounds of layoffs at REI since last year.

Last February, REI laid off about 8%, or 167 workers, at its headquarters on account of the rugged operating environment and a bid to get back to profitability. Later in the year, the company made worker cuts within its retail operations, which totaled about 275 workers.

The workforce reductions have followed REI into this year, with 357 positions cut in January. About 22% of the senior leadership positions are being eliminated this year, while headquarters employees’ merit increases are on pause for 2024.

The latest layoff round was attributed to an “increasingly challenging and highly promotional environment,” Artz told employees in a memo on the cuts that the company posted to the REI site.

“…while the U.S. as a whole has avoided entering a recession (by definition, two consecutive quarters of total U.S. market decline), outdoor specialty retail has experienced four quarters of decline – and that trend has been worsening,” Artz said in his memo. “While we were able to outperform this trend for much of the last year, it caught up to us in Q4 and we now expect conditions to remain very challenging throughout 2024.”

REI operates more than 180 stores in 43 states.