Part 1 of 2: Inside John Stankey’s Memo and the Rise of Market-Based Management at AT&T
One piece of workplace-related news that I haven’t been able to get out of my head is the memo AT&T CEO John Stankey sent out to his company this summer.
Stankey’s memo has garnered numerous (mostly negative) hot takes from analysts and influencers alike. Admittedly, I’m late to the party on addressing it. However, the reason I am now is because it seems to be evolving into an artifact of corporate transformation in real-time.
I dove into the entirety of Stankey’s message and pulled out a few key concepts. Keep in mind, the “memo” is in fact a 4000-word essay that takes about 15 minutes to read on its own.
This is the first part of a two part series on this topic.
Overview of the Memo
Opening by addressing AT&T’s 2025 Employee Survey results, which 99,000 employees (73% of the company) took part in recently. 79% of respondents reported feeling committed and engaged with their work – substantially higher than the US average of 32%. However, the remaining 21% of AT&T workers who didn’t respond so favorably are above the national average of 17% of workers who are actively disengaged.
Stankey wrote that he “wasn’t surprised” by the declining employee engagement level and how it had fallen since 2023’s survey. “I understand that some of you may have started your tour with this company expecting an ’employment deal’ rooted in loyalty, tenure, and conformance with the associated compensation, work structure, and benefits,” he stated. “We have consciously shifted away from some of these elements and towards a more market-based culture — focused on rewarding capability, contribution, and commitment.”
Stankey’s makes explicit what many leaders only imply: AT&T is transitioning from a traditional, tenure-based organization to one driven by performance and competition. While not new, this approach diverges from the conventional social construct that many generations of workers have valued, which is rooted in consistency, values, and long-term growth. He contrasts “hierarchical and familial norms” with a model rooted in meritocracy and measurable output. He states bluntly that those unable or unwilling to adapt “may be misaligned with [their] professional choice.”
Notably, AT&T shifted from a hybrid schedule to a five-day in-office mandate earlier in 2025, asking employees to return to the office five days a week.
AT&T seeks to maintain its relevance in the face of digital convergence, fierce infrastructure rivalry, and increasing investor demands. After years of sprawling bureaucracy, mergers, and declining engagement, this message reestablishes managerial authority. Stankey’s remark that “If you dislike change, you’re going to dislike irrelevance even more,” highlights the mindset needed to survive in a world where leaders like Stankey are as replaceable as employees.
From a leadership perspective, this memo communicates clearly and highlights strategic goals boldly and without remorse. Stankey doesn’t mince words when it comes to the cultural expectations that are soon to befall AT&T. His focus on metrics, accountability, and return-to-office (RTO) aims to bring the team closer together, whether they like it or not. Stankey said those who want hybrid work “will have a difficult time aligning” with company priorities.
Yet, his memo also exposes the risks of market-based management. His tone is transactional, bleak, and managerial rather than inspirational, relying on compliance and endurance rather than emotional engagement. By grounding employee value in measurable contribution and data analytics, the memo risks fostering a surveillance dynamic that undermines trust. The rejection of flexibility and individualized work arrangements further distances AT&T from the collaborative, hybrid, and human-centered practices that shape modern workplace culture.
What Even is Market-Based Workplace Culture?
A market-based company culture is driven by winning market share, profitability, and performance metrics. Many sales-driven firms, investment firms, consumer goods companies, and high-growth startups embody this culture. It’s results-oriented, competitive, customer-focused, and moves quickly, with a leadership style that is demanding, goal-driven, and pragmatic, pushing for high performance and tangible results.
There are undoubtedly some strengths to this approach. It often drives high performance and accountability, encourages market-driven innovation, and aligns the organization closely with the expectations of its customers and investors. This can be incredibly effective during periods of growth or competition.
However, it can lead to burnout and excessive internal competition, leading to a toxic work culture that undervalues collaboration, trust, creativity, and employee well-being. There have been numerous cases where this approach has led to ethical collapse and corner-cutting to meet aggressive targets. Unsustainable workloads lead to high turnover, a loss of top talent, and cultural erosion, which in turn damages both the brand’s reputation internally and externally.
Market-based workplace culture also tends to perpetuate a financial outlook that focuses too heavily on short-term wins, which can hinder long-term growth and adaptation. A culture built on dominating the current market often struggles to adapt well when the market shifts.
Conclusion
Ultimately, Stankey’s message illustrates both the strength and fragility of market-based leadership: it can realign strategy and culture with uncompromising precision, but only if it evolves fast enough to rebuild trust, balance competition with care, and redefine performance in human terms. The memo is almost a textbook case of a legacy corporation formally declaring a shift from a traditional “clan/hierarchical” culture to a market-based one. I commend the transparency, as it’s rare to see a Fortune 500 CEO describe this transition so explicitly.
In my second installment on this topic (Part 2), I’ll examine the implications for HR leaders, technology strategy, and how companies can balance performance with trust, flexibility, and engagement. I’ll also explore what this says about the broader labor market, whether or not a market-based approach aligns with what people are asking for, and if AT&T and Stankey are taking a gamble with this strategy.
Read part 2 here: AT&T’s Market-Based Culture Shift and What It Reveals About the Future of Work – Part 2 of 2