Is Corporate Loyalty Dead?

Is Corporate Loyalty Dead?

AT&T CEO John Stankey's latest memo has generated quite a bit of discussion online.

Since I'm sure everybody has been sitting on pins and needles, waiting with bated breath for my take, here it is. Fashionably late, as always 🤣

You can read the memo on Business Insider, along with some...err, "highlights" they've picked out. Here's the link: https://www.businessinsider.com/att-ceo-john-stankey-email-employee-feedback-survey-rto-policy-2025-8

There's been quite a bit of discussion about whether this memo is a sign of the death of corporate loyalty.

Unfortunately, from what I've learned over the years, I believe that any corporate loyalty that may have existed already died. In fact, it was on life support way back when my father was younger than I am today.

My father is now retired.

This tough lesson got hammered home by two main sources.

#1: Reading. Important references include the classic business book, Barbarians at the Gate, the provocatively-titled but surprisingly sensible Die Broke, and John Bogle's dense masterclass in understating one's outrage, The Clash of the Cultures. 

You can read my post related to Barbarians at the Gate here, and my review of Bogle's excellent book here.

Die Broke, to sum it up quickly, advocates not accumulating a pile of cash, but instead using mechanisms like annuities and charitable remainder trusts to ensure a lifelong stream of income. It's a worthwhile read, even if only to shake things up - it'll definitely make you question conventional wisdom!

Each of these books, in its own unique way, makes essentially the same point. To sum it up in a single sentence, it's that the greed at the top of the corporate hierarchy has absolutely demolished any sense of obligation to anything but their own bank accounts!

If you have no experience seeing it, you probably don't understand the depth. Even having read quite a bit about it, I still don't understand the depth of this kind of greed.

But I can certainly see the results.

#2: The CEO-to-worker pay gap over time. I've discussed this before, and organizations like the Economic Policy Institute post about it routinely, but it somehow still doesn't get discussed nearly enough.

Here's a recent finding from the EPI, issued in 2024, based on 2023 data.

Is there anything worse than that?

Actually, yes.

It's the productivity-pay gap.

Americans, in aggregate, have been getting more productive since the start of the EPI's dataset in 1948. But, since around the early 1970s, average pay has not kept pace with the increasing productivity.

So the average American is more productive than ever - all so that their boss can get a new car, their boss's boss's boss can get a new Ferrari, and their CEO can get another vacation house on the beach.

So what's the point, other than rabble-rousing?

Contrary to Betteridge's Law of Headlines, the answer to this title "Is Corporate Loyalty Dead?" is a resounding "Yes!"

Corporate loyalty to its employees is not just dead. It's not even rotting. It's already skeletalized.

Stankey's memo is simply another instance of an 'elite' saying the quiet part out loud.

Two things can simultaneously be true:

1. Stankey is correct that promotions and raises should not necessarily be given based on tenure, loyalty, and "familial cultural norms." In a highly competitive market, that's an eventual death sentence.
2. Stankey's memo is an out-of-touch missive from somebody who is pulling the ladder up behind him, while arguing that an overgrown dinosaur is actually a nimble predator.

In fact, some people assert - and I'm inclined to agree, though of course I don't know Stankey or any of AT&T's C-suite - that this memo is simply meant to convince some employees to quit, especially the older and more highly-compensated ones.

That way, the company gets to reduce its headcount without paying severance, unemployment, or other benefits. This reduced headcount will lead [briefly] to a higher profit margin, and thus a larger bonus for Stankey himself.

And when the chickens come home to roost, Stankey himself will be happily retired.

Conclusion

Over the past 40 or so years, employees have been better off thinking of themselves like free-agent athletes. If you can get more money elsewhere - leave. Get the cash while you can.

Your employer already sees you as a free agent. And if you're foolish enough to work for below market value, they'll be happy to pay you less than your skills and expertise are worth.

If you're waiting for your employer to recognize your commitment and talent, you too can expect to be skeletalized before your loyalty is rewarded.

Act accordingly.