An organization’s culture is a major contributing factor when candidates are selecting between positions. Of course, compensation packages and actual take home pay still matter, but 66% of candidates include an organization’s culture as the top factor when evaluating their career moves (Anderson) and organizations that “actively manage” their culture have a retention rate 40% higher than companies that do not (GR8 People). If it is universally agreed that organizational culture is important in selection and retention of employees, why do companies still struggle during cultural change? Let’s follow the outdoor clothing retailer Patagonia, well known for its products as well as its strong non-traditional culture to better understand. The $1.5 billion dollar California-based Patagonia and its 3,000 employees experienced a crisis.

First, a definition of organizational culture is needed. The Harvard Business Review defines organizational culture as “consistent, observable patterns of behavior in organizations.” (Watkins) Other sources define organizational culture as “the way we do things” and “a jointly shared description of an organization from within.” (Watkins) Patagonia’s organizational culture is based on its core products—outdoor clothing including iconic fleeces, hoodies, and backpacks. Built into these core products are Patagonia’s unconventional and one-of-a-kind culture which include taking care of employees, customers, and the environment with their “Let My People Go Surfing” Employee Handbook. Employees thrived in Patagonia’s relaxed and environmentally focused environment, and the company was heralded for its employee dedication and commitment.

Then COVID-19 happened. And the world changed, even for companies such as Patagonia. In June 2024, “Ninety employees in the customer service department, known as customer experience (CX), received a text message and an email to inform them that a ‘town hall’ meeting would be happening in 30 minutes. According to an employee who asked to remain anonymous, the department-specific online meeting lasted about 15 minutes, and unlike in other meetings, the chat function was turned off.” (Baker) The purpose of this meeting become abundantly clear quickly. Top management stated that the company was 200-300% overstaffed for ten months out of the year, and employees were given 72 hours to move to another location or be terminated. These workers were about one-third of the customer service team. The company’s follow-up email stated that employees more than 60 miles of a hub city location would be required to relocate. Those employees that live less than 60 miles are being laid off. To say that the employees were in shock is an understatement. One employee stated, “It’s a huge decision to make if you're going to uproot your life and go to another city, and you're supposed to decide that in two or three days?" (Biasotti) Just a few hours later, Patagonia shut off the work computers of the affected employees. Part of this was blamed on the pandemic, and part of it was blamed on the company’s culture. A source inside Patagonia indicated that the pandemic dismantled the thriving work culture that once existed at Patagonia.

Patagonia, once a company so strong in its unconventionality, is not immune to changes and mistakes in changing organizational culture. For an organization so focused on its people, was an online 15-minute meeting with no opportunity for comment really the best venue for this message to its employees? Human resources professionals would resoundly say no. The future will hold how Patagonia rebounds from these human resources misstep and recreates a new organizational culture.