Layoffs are affecting diversity efforts but focusing on DEI now is more important than ever.
Layoffs in 'Big Tech' have dominated headlines in recent weeks. Now reports are emerging that these layoffs adversely impact diversity in more ways than one.
How are layoffs affecting diversity?
Underrepresented Employees Disproportionately Affected
At large tech organizations, layoffs are typically made in non-technical departments - for example, HR, customer success, and marketing, rather than core technical departments. These fields are more likely to employ women and ethnic minorities than traditional tech roles.
Even within technical roles, there are reports of underrepresented employees being adversely affected. A current lawsuit against Twitter claims that 63% of women lost their positions for engineering roles compared to 48% of men.
Data from Revelio Labs Inc has highlighted that women and Latino employees have been made redundant more than their industry representation. While these demographics make up 39% and 9.9%, respectively, they have made up 46.6% and 11.5% of layoffs since September.
DEI teams cut
DEI teams have also been significantly affected by layoffs or cutbacks. Twitter is reported to have reduced its DEI team from 30 people down to just two. Meanwhile, listings for DEI roles fell 19% last year, according to Textio.
Companies are scaling back recruitment and targets even where teams haven't been directly affected by layoffs. Meta management has admitted that cutbacks will slow down diversity hiring efforts. This could leave DEI specialists taking on additional responsibilities, spreading them too thin and putting initiatives at further risk.
Cost of cutbacks
While tech companies might be thinking about the bottom line, cuts that affect diversity have a significant cost.
Firstly, these cuts set back efforts to increase diversity and inclusion in the tech industry, and a lack of resources damages hiring, training, coaching, and inclusivity initiatives.
Companies who scaled up DEI efforts in recent years following Black Lives Matter protests also risk damaging their reputations if they choose to scale back before targets are met. Cuts to DEI efforts or laying off underrepresented groups could also harm future DEI hiring efforts. McKinsey has reported that 39% of the workforce won't accept a role if they believe the company is not inclusive.
The Business Case for DEI
While companies should invest in DEI to achieve equitable access to opportunity and inclusivity for all, there is also a strong business case for it. McKinsey research has highlighted how companies with over 30% female executives outperform their counterparts, which is true of companies with increased ethnic and cultural diversity. Equally, two-thirds of Americans base their shopping choices on social values. Companies that fail to meet these values could see a fall in sales and customers. DEI doesn't stop being important when companies face difficult times. DEI is more critical now as underrepresented groups face increased challenges from broader market conditions. Companies that focus on supporting their people and reinforcing their commitment to DEI are more likely to weather the storm, while companies making cuts will suffer in the long term.
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