Patagonia to lay off as many as 90 employees if they won't relocate

Ventura-based Patagonia has told around 90 remote workers that if they want to keep their jobs, they’ll have to move to one of seven metropolitan areas, none of which are in California.

The employees are customer service representatives who are scattered around the country and take customer calls, emails and chat messages from home or wherever else they’d like to work.

"I think a lot of people are still trying to absorb the fact that it's happening," said a Patagonia customer service worker who asked not to be named because they plan to be laid off and didn't want to endanger the severance package the company has promised.

Patagonia spokesperson Corley Kenna said managers have already had one-on-one conversations with everyone, and “a few people have said they want to relocate.”

Most of the 90 or so employees have chosen to be laid off rather than relocate, the customer service worker said. The affected workers represent a little more than a third of Patagonia’s customer service staff.

On Tuesday morning, the affected workers had their customers service calls shut down and were told to join a video conference “town hall” meeting with management.

"For the half an hour between when they turned the phones off and when they had the meeting, it was super anxious," the customer service employee said. "Nobody knew what was going to happen. They never do anything like this, an unscheduled meeting."

During the meeting, the employees were told that the outdoor apparel company wants them to move to one of seven “hub” cities: Reno, Salt Lake City, Dallas, Austin, Chicago, Pittsburgh or Atlanta, according to an email sent to the employees after the meeting ended.

They were given two options: live within 60 miles of one of the hub cities, and in the same state; or accept a layoff and severance package. They have until Friday to decide.

During the meeting, everyone listened in disbelief, according to the customer service employee who spoke with The Star. Having just three days to decide whether to move to Reno, Pittsburgh or any of the other cities was particularly upsetting, the employee said.

"It’s a huge decision to make if you're going to uproot your life and go to another city, and you're supposed to decide that in two or three days?" the employee said.

Patagonia is offering $4,000 for moving costs and five extra paid days off for people who decide to relocate. Those who choose not to move will get either 13 weeks of pay as severance or two weeks of pay for each year with the company, whichever is more, along with compensation for a year’s worth of medical insurance, bonuses they would have earned and other benefits.

People who stay with the company will have until Sept. 30 to relocate. The last day of work for those who choose not to move will be July 3.

Patagonia expects to come out of the change with fewer customer service workers. “CX has been running 200-300% overstaffed for much of the year,” the email to employees said, “and we simply can’t continue to operate at this level given the broader business realities.”

"CX” is short for “customer experience,” Patagonia’s name for its customer service department.

“For the better part of a year we’ve been overstaffed,” Kenna said. “That’s just not sustainable from a business perspective.”

Kenna added that Patagonia is not overstaffed in other departments and is not planning other layoffs. The company has about 3,000 employees worldwide, she said.

Patagonia began to phase in the “hub model” for customer service last year, by focusing its hiring in the seven hub cities. The plan was to bring the department more in line with the rest of the company, where in-person work has been the rule except for early in the pandemic.

At the Ventura corporate headquarters, employees are usually expected in the office three days a week, Kenna said.

“What we learned, with all of these employees being fully remote, is that our culture and some of the things that we really hold dear in our culture were suffering, because people weren’t together,” she said.

Until 2020, all customer service representatives worked in a call center in Reno, where Patagonia also has a warehouse and distribution center. In the new “hub model,” people who choose to move to Reno can work at the call center or at home. In the other cities, the employees will continue to work remotely and will report occasionally to Patagonia retail stores for in-person training and meetings.

“The hub model allows us to create consistent opportunities for in-person connection, an important element of Patagonia’s culture that has been missing from CX since the pandemic,” Patagonia’s memo states.

Kenna said customer service representatives will be expected to show up in person, at a local Patagonia store, about once a month.

“In all of those cities we have a store presence, and in some we have more than one, and the idea is that by creating a higher concentration of Patagonia employees, CX reps who were sort of out on their own before will have a place to go in and participate in community events, film screenings, yoga, group runs, everything we offer at our locations,” Kenna said. “We’re Patagonia, so we love to encourage people to get outside together and engage with the community.”

Patagonia chose the seven hub cities based on a variety of factors, she said, including cost of living, geographic diversity, and a strong Patagonia retail presence. She said no one will be paid less if they relocate from an area with a high cost of living to a place that’s more affordable.

Patagonia customer service workers start at $20 an hour, Kenna said.

That’s more than the California minimum wage of $16 per hour, but it’s nearly triple the minimum in most of the states with the new “hub” cities. Six of the seven cities are in states where the only minimum wage is the federal standard of $7.25 an hour. Chicago is the exception; the Illinois minimum wage is $14 an hour.

And all six states where Patagonia is moving its customer service workers — Nevada, Utah, Texas, Illinois, Georgia and Pennsylvania — have private-sector hourly wages that are below the national average, according to the U.S. Bureau of Labor Statistics.

“That’s not a factor at all,” Kenna said. “We don’t pay anyone the minimum wage, anywhere. We always pay well above that.”

Tony Biasotti is an investigative and watchdog reporter for the Ventura County Star. Reach him at tbiasotti@vcstar.com. This story was made possible by a grant from the Ventura County Community Foundation's Fund to Support Local Journalism.

This article originally appeared on Ventura County Star: Patagonia to lay off as many as 90 employees if they won't relocate