REI is eliminating its outdoor classes, events and tours this month as it looks to prune unprofitable parts of its business while struggling to break even.

The Issaquah-based co-op will lay off 180 full-time and 248 part-time employees with the move, according to an email from CEO Eric Artz sent to employees Wednesday. Sixty-seven Washington-based workers will be affected.

“They didn’t do anything wrong,” Artz said in an interview with The Seattle Times. “They’ve worked really hard at this business. … I’ve personally participated in a lot of those trips and they’re phenomenal.”

Affected full-time employees will receive their full salary and benefits through March 9. Workers who split time between the stores and the events, classes and tours business — known collectively at REI as Experiences — may be able to stay with the company, depending on the store. REI has more than 16,000 employees.

Experiences have been a staple of REI for more than 40 years. But that side of the co-op has never been profitable. To keep it afloat, REI has had to use money from the retail side to subsidize Experiences, which loses millions of dollars every year.

REI has 25 million members, 8.5 million of whom purchased something from the co-op last year. Of those, just 40,000 went through an Experiences class or event.

REI will update customers and partners this week. The company will work with travel partners to terminate contracts and any customers currently booked will receive a full refund.

The co-op’s message to employees Wednesday morning said that funding ambitions like Experiences isn’t sustainable. Instead, REI needs to focus on selling outdoor gear and apparel.

The co-op has been navigating troubled financials for the past few years. It lost $311 million in 2023 and its biggest goal last year was to break even. The 2024 results aren’t final, but Artz said he believes REI is close to that goal.

“That’s a significant achievement after the roller coaster of COVID for retail,” he said.

When it gets rid of the outdoor classes and events, REI will push that money into its primary business as an outdoor retailer. The note to employees said the company is rooted in the gear and apparel it sells.

REI also plans to invest in better technology for its supply chain and online store, according to the message to employees.

“Customers should expect more tailoring to their individual wants and needs,” Artz said. “They will see enhanced experiences in our stores. We’re redeploying those losses in Experiences to what millions of customers are telling us they want more of.”

The biggest earners for the co-op are camping and hiking items, and outdoor apparel. REI has doubled down on the hot brands in those spaces like Arc’teryx and Vuori, as well as more product from its discount line, REI Outlet.

In the note to employees, Artz said REI explored multiple options to keep Experiences running but any effort to make it profitable would have diverted resources away from the retail side.

“It’s a business decision to redeploy resources to our core business,” he said.

REI’s sales fluctuated between $3.7 billion and $3.85 billion from 2021 through 2023, suggesting it can’t rely on sudden revenue growth to return to profitability. The co-op posted losses in 2022 and 2023 after a solid 2021.

Artz said REI has worked on the cost side of the business. Stores across the country have worked to control inventory and limit the amount of items sold at a discount. Cutting divisions like Experiences is another step in reigning in costs.

REI won’t back away from other community outreach. It’s still devoted to philanthropic spending and will fund a team to test ways to deliver outdoor classes on a smaller scale.

The co-op also told employees last year it was flattening its leadership structure.

Executives’ ranks had grown so that some at the top were too many layers removed from workers on the sales floors, Artz said in an August message to employees. After six executives left in 2024, two of the roles were eliminated.

REI has faced the same headwinds as other retailers. Supply chain issues, inventory glut and reduced discretionary consumer spending have hit apparel companies over the past few years. For retailers specializing in winter clothing, warmer winters have affected sales as well.

Last year, Artz told employees that 2023 had a historically slow start to the cold-weather shopping season. The winter was the warmest on record in the U.S., according to the National Oceanic and Atmospheric Administration.

Warm winters create an inventory problem, as retailers don’t want to buy products that they’ll have to sell for a discount come spring.

But Artz is optimistic about 2024’s year-end results after telling employees in August the company was taking several actions to brace against any potential winter weather hiccups.

“We saw growth in December,” he said. “Our teams did an excellent job of managing inventory and we saw a healthier mix of overall business.”

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