AT&T killed the workplace fairy tale

Happy Thursday, everyone.

I'm Frank Richardson, an organisational psychologist observing the workplace with curiosity and care. Each week, I share insights to help HR leaders better understand the people behind the processes and build cultures where both individuals and organisations can thrive.

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This week in workplace whiplash 🌀

From disengaged managers to hybrid hypocrisy, here's what’s keeping HR teams on their toes this week:

• 📉 U.S. employee engagement stalls at 32%
  Gallup’s mid‑2025 snapshot shows engagement remains stuck at just 32% - suggesting workers are emotionally checked out even during bounce‑back months.
   👉Gallup

• 🏢 Nearly half of UK companies pull the hybrid plug
  A new survey finds 48% of British firms are ditching hybrid models and demanding full-day office attendance, despite employee pushback over productivity assumptions.
  👉ITPro

• 🎢 CEO turnover hits a record mid-year high
  Across industries, 1,235 CEOs stepped down in the first half of 2025 (a 12% increase from last year) with hospitals alone seeing 68 exits, many replaced by interim leaders.
  👉PSQH

• 🔄 Female CEO exits continue trending upward
  This year marks a record number of female CEO ousters (14 so far) bringing renewed attention to gender disparity in leadership churn.
  👉AInvest

Managers are the linchpin of engagement, yet their morale is sliding fast. With return-to-office mandates risking backlash and leadership churn eroding stability, the gap between what employees expect and what companies deliver is narrowing into a pressure point… one that AT&T’s recent CEO memo puts squarely in the spotlight.

AT&T’s CEO, John Stankey, just made official what many workers have suspected for years: your job isn’t a forever home, it’s a rental.

In a memo that went viral after landing in Business Insider’s inbox, Stankey told employees to stop expecting job security, tenure-based promotions, or guaranteed remote work. Translation: if you want a gold watch, buy your own.

Some folks applauded the candour. Others called it corporate nihilism. But in my world of organisational psychology, this is a live demo of what happens when a leader publicly ignores the psychological contract: the unspoken pact that if you give your all, the company has your back.

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✏️ Editing the unwritten rules

The psychological contract isn’t written down. It’s that silent understanding:

“Work hard, be loyal, and we’ll treat you fairly, keep you safe, and maybe even grow you.”

Stankey’s memo didn’t scrap the deal entirely, but it spelled it out with a few clarifications:

• “Seniority? Not the deciding factor.” Promotions are about performance, not just time served.

• “WFH forever? Not the default.” Flexibility is shaped by business needs.

• “Job for life? Not the model.” Employment depends on market realities.

For some, spelling this out feels like breaking trust. For others, it’s refreshing to have the fine print right there in black and white. Either way, it’s a shift from reading between the lines to… just reading the lines.

🧠 Why this can blow up employee trust

Breaking the psychological contract isn’t just bad PR, it’s also bad for performance. According to a meta-analysis by Zhao et al., breaches trigger:

• Plummeting discretionary effort (“Why bother?” syndrome)

• Spike in turnover intentions (Bal et al., 2008)

• Drop in organisational citizenship behaviours (that’s the “helping each other” stuff you can’t KPI into existence).

On the flip side, employees will stomach change more easily if leaders: clearly explain why the change is happening, show that they care, and give staff a voice. In fact, research shows that transparency, when paired with genuine dialogue, can strengthen trust rather than weaken it.

The question for AT&T is: did this memo read as transparency… or as a pre-emptive “don’t get too comfortable”?

🔥 HR playbook for surviving the honesty bomb

1. Tell the truth without torching morale.
   Candour ≠ cruelty. Frame hard news with empathy (and no, a smiley face in the email doesn’t count).

2. Swap the promise, not just scrap it.
   Can’t do job security? Then double down on career development and skill-building.

3. Monitor the fallout like a hawk.
   Breaches can lead to disengagement faster than you can say “exit interview.” Track sentiment and act before it calcifies.

4. Remember: trust is a glass vase.
   Once it’s cracked, no amount of “team-building” glue will hide the break. You’ve got to rebuild, not patch.

💬 Final thoughts

Work has always been a transaction. Putting it in bold might cut the romance, but it can also cut the guesswork. AT&T’s bet is that candour will keep the right people on board. The rest? Well, they now know exactly where the exits are.

If something here speaks to you, I’d love to hear it.

Until next week,
Frank

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