REI was set to relocate more than 1,000 employees in a gleaming headquarters complex built on an 8-acre site surrounded by parks and desert just east of Seattle in Bellevue, Wash., This summer. And then the pandemic hit.
Now the outsider is looking to sell his buildings and land in Bellevue’s Spring District, a surprise decision that reflects the rapid shift to remote work.
REI said it will move to a less centralized headquarters approach that spans multiple locations in the Seattle region. The company introduced in early March an almost 100% work-from-home policy for HQ staff.
“The dramatic events of 2020 have challenged us to re-examine and rethink every aspect of our business and many of the assumptions of the past. That includes where and how we work, ”REI President and CEO Eric Artz told staff today in a video call. “As a result, our new experience of ‘headquarters’ will be very different from the one we proposed more than four years ago.”
Artz’s comments are similar to what Zillow Group said last month, after the Seattle rioters said that 90% of its staff could work at least indefinitely, at least part of the time.
“Our old preferences were dismantled during the pandemic,” said Zillow Chief People Officer Dan Spaulding.
Artz said having a divided workforce “will have a direct, positive impact on our ability to attract and retain a diverse and highly skilled workforce.”
REI said a sale of its Spring District buildings will also help the company financially with a “positive return on investment.” It made several cuts to savings this year, including layoffs and salary cuts.
REI has had its headquarters in Kent, Wash., Since 1988 and announced its intention to relocate to Bellevue in 2016. The cooperative plans to ‘build the outdoor area into our campus’ with green space all around, outdoor meeting rooms, and more.
REI has 161 retail locations in 39 states. It reported $ 3.12 billion in sales last year. The stores close temporarily in March.
Artz said the company did better in the pandemic than its initial revenue expectations. Camping is growing in popularity as Americans move closer to home vacation.
Facebook has leased more than 500,000 square feet of space in the Spring District, a new development with 3 million square feet of office space. The social media giant announced last week that it will allow employees to work from home until July 2021 as COVID-19 continues to spread across the US
GeekWire reported last week that the lack of large tech employers in downtown Seattle is causing a crisis for many small business owners who rely on office workers to buy lunch, drinks and other services.
Here’s a memo that Artz is sending to employees today, received by GeekWire:
Team, I want to share the news below that I just shared with our headquarters teams
The essence of co-op is that we see our work, our company and our purpose differently. We exist to make a significant and positive impact on the outside world and on our community. And we have the courage to take the unusual path of getting there.
Today I make an announcement in that spirit.
We’ve decided to pursue a sale of our buildings and land in Bellevue’s Spring District – and, with that sale, move on to a new model for our headquarters that reflects the way we live, work and function as a power better will serve positive change.
The dramatic events of 2020 have challenged us to re-examine and rethink all aspects of our business and many of the assumptions of the past. That includes where and how we work.
We have been expanding our mobile work opportunities over the last several years in preparation for our planned relocation of headquarters. Our progress was accelerated by the COVID-19 pandemic – we learned that the more widespread approach we previously thought would be untenable instead of unbelievably potentially unlockable.
As a result, our new experience of “headquarters” will be very different from the one we proposed more than four years ago.
Rather than a single location, our “headquarters” will span multiple satellites over the greater Seattle area.
Remote work will move from a temporary solution to a more intrusive, supportive and normalized model for many of our headquarters staff.
And although our home remains in Seattle, it will be more possible for more of our headquarters staff to have the flexibility to live and work outside the Puget Sound region.
This will have a direct, positive impact on our ability to attract and retain a diverse and highly skilled workforce as we continue to address the effects of the COVID-19 pandemic and beyond.
Our members, our company, and our positive impact on society will also benefit from this transaction.
The sale of our property would bring a positive return on our investment – and thus the ability to invest part of that unlocked capital in ways that are consistent with our strategic vision and our four measures of success – our impact on our employees, our members, our company and society.
These dollars would also play an important role in stabilizing our business due to the ongoing consequences of current disruptions. As we have discussed, we are performing better than our initial revenue expectations for how we would manage through COVID-19, but the pandemic is far from over, and it is important and prudent that we ensure that the co-op is prepared for the near -security of additional disturbances ahead.
The rapid innovation we have made in response to the COVID-19 crisis has been inspiring, but it has also made clear the areas where we have opportunities to improve and better meet the changing needs and expectations of our customers about our offerings and our omnichannel capabilities. We have important work to do in this space and this sale would provide financial security to help accelerate the efforts.
We know that the financial stability of REI has a direct impact on our ability to continue to support our nonprofit partners, whose work is to connect people of all races, genders, ages and capacities with matters outside of it now more than ever. The proceeds of a sale would also help us to accelerate the progress towards reducing our carbon footprint.
We will provide more detail on all of this in the coming weeks and months, but here are the important things for you to hear and take away:
- We work actively to find a satellite location to the East side.
- We also work to secure a satellite location in southern Puget Sound.
- We are looking for extend our Georgetown lease.
In the meantime, we know that guidance from the province and state will continue to limit our headquarters experience for at least the rest of 2020. And we expect the majority of our headquarters team to be home by the end of this year and at home. work until 2021. We would still have jobs for those whose work requires them to be physically present.
And, in the months and years to come, this multi-location model and increased focus on working remotely from locations outside the Seattle area makes it possible for more employees.
With that said, I recognize that I work from home, and in multiple locations, it not only brings increased flexibility, but its own set of unique challenges.
If you’re like me, you’ll miss the feeling of community.
You miss hallway conversations.
You miss work sessions personally.
You will miss our incredible cultural moments, such as Anderson Awards.
This is an enormous part of what COVID-19 has taken. But I am confident that we can solve all this and more through innovation, collaboration and imagination.
We will have more answers and more detail than work after completing a potential sale in the next 60-90 days.
It is important that you know that this has been a challenging decision. I know it will land with everyone else, and I want to thank the teams who have put a lot of time and passion into this project. And I’m sure the sale of the Spring District campus would have a positive impact on the future of REI – and those.
This year has shown us that our house is not a building. Our home is everywhere we do our best work, pursue our outdoor spaces, serve our communities. Serve one another.
That’s what we’ll build on as we move forward – and as we accelerate into what’s next.
Thank you so much for having the courage to step into this moment. I look forward to the work ahead.
Eric
