DEI teams in global organizations including Amazon and Twitter have been hit with alarming mass redundancies that have sent shockwaves around the world. This is a big turnaround from the many major industry players who voiced their commitment to diversity, equity, and inclusion only a couple of years ago. And these tech layoffs are setting a worrying precedent for smaller organizations in the tech industry and the wider employment community. In fact, according to a recent Bloomberg report, listings for DEI are already down by 19%.
So, what’s going on? Why are these companies targeting their DEI teams? Why have they turned away from their commitment to DEI initiatives? And what impact is this going to have on these businesses?
Let’s find out.
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Tech layoffs and DEI teams
The tech sector has been over-hiring for some time, primarily due to the surge in tech startups offering post-COVID-19 solutions. But the hiring wave is now passing. This, coupled with the economic downturn, inflation, increasing interest rates, and investor pressure has led to mass layoffs in the industry. In fact, tech layoffs were up by 649% in 2022. This is the highest rate since the dot-com bubble of the late 1990s. And DEI roles are being hit hard.
This is a stark contrast to the boom in DEI initiatives that came after the Black Lives Matter protests of 2020. At this time, companies from many sectors made a commitment to the promotion of diversity and inclusion in the workplace. They also invested in the creation of DEI teams to support their efforts. So much so that, according to McKinsey, DEI job listings increased by 123% following the murder of George Floyd.
These mass tech layoffs are undoing all the positive progress that these companies have made since this time, and this is a concern. Moreover, many DEI departments that are still operational are already seeing cutbacks. And all this comes at a huge price for many aspects of a business.
For one thing, going back on a promise to nurture diversity is going to have a big impact on an organization’s employer brand. Employees, especially those from younger generations, are far less likely to accept a job if they perceive a lack of inclusion in the workplace. The same applies to consumers. Increasing numbers are looking for brands that have made a public commitment to ethical working practices, including diversity and inclusion, before making a purchase decision. And this will hit these businesses hard.
Tech companies under fire
A number of global tech companies have announced major cuts to their DEI teams this month. The most notable include Amazon, Twitter, Meta, Microsoft, and Refin.
Twitter, for example, has drastically reduced its DEI team from 30 employees to 2. This represents a departmental decrease of over 93%. Twitter employees also claim that leadership has stopped setting long-term DEI goals. Both these factors will have a huge impact on the company’s ability to promote DEI initiatives.
Tech layoffs have impacted DEI at Twitter in other ways, too. For example, when Twitter announced cuts after Elon Musk bought the company, layoffs included 57% of the company’s female workers. As a result, two newly former employees filed class-action discrimination lawsuits. They claimed that “Musk violated employment laws by discharging significantly more women than men”.
Moreover, Amazon laid off 18,000 employees at the start of the year. This is the largest workforce reduction in the company’s 28-year history. Many of these redundancies included roles in Human Resources, affecting many DEI professionals. Amazon has also announced a hiring freeze suggesting that there isn’t going to be any further investment into DEI for some time.
Meta has also announced major tech layoffs and cost-cutting initiatives. Not only that, but management has admitted that this will significantly slow down its diversity hiring efforts. This is a big turnaround from the tech giant’s pledge in 2019 to increase the proportion of Black and Hispanic employees by 2024.
The danger now is that this strategy of reduced DEI investment will trickle down to smaller players in the tech industry. This will severely hinder DEI progress and reinforce the dominance of white and Asian males in the sector.
Why are these layoffs happening?
We already mentioned economic and general downsizing above. But what else is behind these tech layoffs? Why have these companies implemented so many cuts to their DEI teams?
One significant contributing factor comes down to the “last in, first out” approach to layoffs. Many of these DEI professionals were hired in the wake of the Black Lives Matter movement, so they haven’t been on the payroll for long. And this means that DEI teams have been pushed to the front of the layoffs line.
Another important factor is that many organizations still do not understand or appreciate the benefits of promoting diversity, equity, and inclusion. Many still regard DEI as an overhead rather than a profit-making strategy. In fact, Gartner reports that 51% of surveyed DEI leaders claimed that their biggest challenge is getting business leaders to take ownership. The same goes for investment as many companies have failed to provide their DEI teams with sufficient resources. And this lack of leadership buy-in and funding seriously undermines the development of effective DEI initiatives.
The only long-term solution for all this is to change our approach to DEI. And this starts with Human Resources. It is up to us to convince our leaders that DEI teams can positively impact the business. DEI teams aren’t just for show. With the right approach, they can positively impact engagement, employee wellbeing, retention, and profitability.
We also need to design the right policies and strategies. This incudes those that drive pay equity, diverse cultures, and inclusive hiring practices. Only then will leaders understand the true value of funding DEI and creating more inclusive workforces.
Why DEI teams matter
Let’s take a look now at why DEI teams are so important.
Let’s start with the basics: What is DEI?
DEI initiatives are employment actions based on the principles of diversity (employing people with a range of social identities), equity (creating systems that ensure equal access), and inclusion (ensuring all voices are heard). The aim behind these initiatives is to create a working environment that benefits all employees, regardless of gender, ethnicity, socioeconomic background, or mental and physical ability. Examples of DEI initiatives include diverse hiring practices, DEI training, and ERGs (employee resource groups).
Creating and funding a DEI team to manage these initiatives and promote diversity, equity, and inclusion in your business can help you:
- Develop fair hiring practices and promote pay equity.
- Attract and recruit top talent.
- Increase retention and decrease turnover.
- Boost employee wellbeing, morale, and engagement.
- Create a culture of belonging and nurture a more positive workplace.
- Access a broader range of perspectives and drive innovation.
- Generate fresh insights.
- Develop a mission statement founded on equal opportunities that boosts your employer brand and your overall company brand and reputation.
- Understand your customers better.
- Gain a competitive edge.
- Attract more sales and boost your profitability.
Alternatives to DEI team layoffs
So, what are the alternatives? How can companies move forward in this difficult economic climate without damaging their ability to build a diverse and inclusive workforce?
One leading example was implemented by API company Twilio. Twilio announced last year that its cuts would not disproportionally affect its commitment to DEI. The company promised that redundancies would be implemented through an “anti-racist/anti-oppression lens”. In other words, employees from marginalized communities would not be significantly affected by cuts.
What can we take from this? Essentially, that it’s important to consider a range of factors when you implement layoffs, not just seniority. You also need to consider the impact that layoffs can have on the wider community. If you have to implement redundancies, do it fairly and consistently. Instead of falling back on old strategies that are open to confirmation bias and adverse impact, follow fair layoff practices. Make sure redundancies are based on performance not seniority. If you’re still in doubt, check out our tips on handling layoffs for more best practices.
Finally, if you do have to cut your DEI team, don’t abandon your DEI initiatives. Maintain your commitment to promoting diversity, equity, and inclusion. Make sure it is reflected in all your policies and procedures. Use a DEI dashboard to track your DEI metrics and analytics to make sure you are working towards defined DEI objectives. And use the right technology to identify racial and gender pay gaps and keep track of your workforce demographics.
Ultimately, even if you have to implement DEI team layoffs, you can still drive DEI progress. What’s important is that you stick to a defined DEI strategy. With the right approach, you can build a more diverse workforce and drive engagement, productivity, retention, and profit.
