Are Return-to-Office Mandates Really Just Layoffs in Disguise?
Workspan Daily
June 28, 2023
Key Takeaways

  • Assessing AT&T’s recent return-to-office mandate. AT&T recently mandated a return to office for targeted offices only, raising the idea that it may be an attempt to cull its workforce without having to enact painful layoffs. 
  • Not a prudent or advisable strategy. Observers are skeptical that the mandate will lead to other organizations doing the same thing, as such strategies can damage employee trust, morale and the company's reputation.  
  • Separate layoffs and return-to-office mandates. While there is no legal “right” for employees to work remotely, whenever an organization makes an return-to-office (RTO) mandate, it still needs to be prepared to clearly communicate the legitimate business needs for having their employees report back to the office.  

Observers are divided on whether AT&T’s recent return-to-office (RTR) mandate will prove to be a proactive move to maximize its talent or “just a ploy to cut jobs.”  

In May, AT&T CEO John Stankey mandated that 60,000 managers must report to work in person — but only at nine specific offices among its 350 locations spread across the country. 

According to Bloomberg, Stankey’s demand is “a high-stakes game of musical chairs” with team leaders making location assignments to a handful of hubs focused on specific duties.  

While the move may result in net savings for the company, many employees now facing long commutes or relocations view it as an attempt to shrink the workforce.  

“It’s a layoff wolf in return-to-office sheep’s clothing,” said one anonymous AT&T manager. 

Stankey estimated that among the managers affected, 9,000 will have to choose between moving or leaving the company. But with the proposed office scalebacks and work realignments, the estimate is probably closer to 25,000. Most won’t be eligible for relocation money, several managers told the news outlet.  

An AT&T spokesperson said relocation offers will be made by team leaders on a case-by-case basis. 

“Many will make decisions that are appropriate to their lives,” Stankey said. “If they want to be a part of building a great culture and environment, they’ll come along on these adjustments and changes. Others may decide, given the station of life they are in, that they want to move in a different direction.”  

The mandate, Stankey said, is focused on the future of the nation’s largest phone company: “This is how we get the right people doing similar functions in the right places where they can collaboratively work to build this company for the next 10 years.” 

So is there a business case to be made by following AT&T’s playbook in ordering all — or a specific segment of — employees to RTO as a form of trimming staff? 

‘A Ploy to Cut Jobs’ 

The phone giant’s recent mandate is an “unusual” one, pointed out Sandra Sucher, professor of management practice at Harvard Business School.  

Companies typically announce return-to-work policies or big layoffs separately, Sucher told Bloomberg, adding that AT&T’s announcement “seems to be serving multiple goals.”  

The RTO message is also “an elaborate restructuring with cost cuts,” Sucher said. If a company is “reorganizing and streamlining the business, people at lower levels will feel like it is a ploy to cut jobs.” 

Dan Schwabel, managing partner of Workplace Intelligence, said that implementing such strategies can damage employee trust, morale and the company's reputation.  

“It is essential to treat employees with respect and empathy during any employment transitions to maintain positive relationships and preserve the company's culture,” he said. “If your intention is to lay off employees, you should communicate directly and clearly about the situation. This includes providing advance notice, explaining the reasons behind the layoff, and offering support during the transition.”  

One Thing at a Time 

If your organization is going to mandate employees return to the workplace, just do it, said Shelline Bennett, labor and employment lawyer with Liebert Cassidy Whitmore. 

“Then after their return, follow the legal requirements and best business practices in implementing a layoff,” she said, adding that “the law and your workforce typically sniff out pretext and subterfuge.” 

If an employer tries to utilize RTO as “an end run to layoffs,” Bennett said, the employer could face legal liability in the form of violations of the federal Worker Adjustment and Retraining (WARN) Act and corresponding state laws (such as California’s Cal WARN Act), which mandate among other things, advance notice to employees. 

“Employers also need to pay attention to layoffs having a potential disparate impact on groups of employees in certain protected classes, such as those 40 years of age and over, and corresponding discrimination claims,” she added. 

Organizations also need to be aware that in some jurisdictions or with company policies, laid-off employees may be entitled to severance pay or benefits, Schwabel said.  

“Failing to provide appropriate severance packages or benefits can result in legal issues and damage the company's reputation,” he said. “And if the layoff process is not handled in accordance with applicable wage and hour laws, such as failing to pay employees for all hours worked or not providing final paychecks on time, it can lead to legal and financial consequences.” 

No Right to Remote Work 

Bennett acknowledged that employees do not have a general right to remote or hybrid work. But when an organization makes an RTO mandate, it still needs to be prepared to clearly communicate the legitimate business needs for having employees report back to the office.   

“This shouldn’t be a simplistic, stereotypical conversation about how the younger generation wants remote/hybrid work for a better work/life balance and the older generation is stuck in its inefficient, archaic need for face-to-face communications,” she said.  

Meanwhile, layoffs should follow a well-thought-out and documented plan reflecting the business need, and the focus must be on “positions, not persons.”   

“Employers should not use a layoff to avoid the hard work of managing an employee out due to performance issues,” she said. “Similarly, an employer should not use an RTO to trim the workforce.” 

When pondering any reductions of an organization’s workforce, Schwabel said it’s crucial to remember to comply with applicable labor laws, contractual obligations, and internal company policies.  

Meanwhile, if a client asked Bennett if there was merit to utilizing an RTO to trim its workforce she said she would, “strongly advise against this strategy due to legal risk and damaging employee morale.”  

Editor’s Note: Additional Content 

For more information and resources related to this article see the pages below, which offer quick access to all WorldatWork content on these topics: 

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