CEOs deliver tough talk as workers face a softening labor market

The big picture: The slowing labor market and economic uncertainty have given management an upper hand it didn't have during the COVID era.

• This has been underscored by return-to-office mandates, diversity, equity and inclusion walk backs and layoff fears. Now, once-vocal employee bases are just trying to hang on to their jobs.
• These macro factors, paired with the cultural shift toward more corporate "masculine energy," have created a work environment that looks unrecognizable from that of a few years ago.
• Meanwhile, leaders in Washington and corporate America are working to battle bureaucracy, increase efficiencies and do much more with much less, believing these drastic changes will ultimately pay off.

What they're saying: "There seems to be this shift among employees, with some understanding that most CEOs are in tough positions and they don't want their company to become a target for this administration," says Shallot Communications co-founder Teal Pennebaker.

• "They want their company to succeed, and they sort of understand what their CEO is up against. But these leaders have to explain why the change is happening and tie it back to the broader business strategy or mission."

Yes, but: While employees might not be outwardly dissenting, they are leaking potentially unflattering audio from internal meetings.

• In recent weeks, there's been leaked audio of JPMorgan Chase CEO Jamie Dimon's curse-laden town hall, Starbucks CEO Brian Niccol's rallying cry for employees to step it up and Amazon CEO Andy Jassy's critique of managers with "fiefdoms" who are slowing down the company.

The intrigue: There's a case to be made for strategically leaking these tough talks, says Seven Letter partner Mike Ricci.

• "These leaks are another way to show board members, investors or stakeholders in Washington that they're taking action and they're trying to push change forward."

Plus, this corporate tough talk is in line with the cultural shift that's taking place in the era of Trump 2.0, adds Ricci.

• "It certainly fits the ethos of the moment — which is all about strength, directness, toughness, and what's being called radical transparency. I think these leaders sharing their genuine thoughts is a part of it, but there's also definitely a sense of urgency behind it. These leaders see all the change happening in Washington, and they need their cultures to move faster and to adapt."

Zoom in: Return to office appears to be one of the biggest sticking points within corporate America, even as President Trump leads the RTO push.

• Nearly 40% of the 457 business leaders Axios HQ surveyed say they plan to increase their in-office requirements this year, with most citing collaboration and competitive pressures as the reasons.
• Meanwhile, 31% of remote or hybrid employees say they'd accept termination or look for a new job if in-office days increased. However, roughly half said an increase in benefits would help soften the RTO blow.

Between the lines: Consistency in tone and style is key when delivering unpopular news, Pennebaker said.

• "Employees want to feel like they're hearing from the same leader, even if that message is changing," she said. "And when there's a stark change, employees question, 'Is this actually the CEO that I signed up to work for? Have they ever been speaking to me authentically?'
• "When a CEO can be super real and use their own, frank language, it can serve as a rallying cry and a very important aligning moment."

What to watch: Some executives might have overcorrected during the COVID era by being too touchy-feely or insincere in their employee communications.

• This overcorrection will inevitably happen again, with some CEOs — like Meta's Mark Zuckerberg — going too hard or venturing too deep into the "manosphere."

More on Axios:

• Management is in its Boss Era
• Talking about masculine energy in corporate America