Cutting Costs at the Expense of Diversity
Is big tech revealing its true colors?
In our recent collaborations with The Washington Post and Reuters, we explored how the recent wave of layoffs in Big Tech has hit Diversity, Equity, and Inclusion (DEI) efforts in the industry. As we celebrate Black History Month, we are doing a deeper dive into whether companies are heading into a diversity crisis by laying off their DEI talent.
As the uphill battle for diversity unfolded during layoffs, some companies have also had sharp declines in their share of diverse new hires. Some well-known names lead this list: American Airlines, Glassdoor, and Wells Fargo are among the employers with the largest declines in diverse hires among companies that have experienced recent layoffs.
This decline in diverse hiring is not surprising, given the disproportionate impact of layoffs on DEI professionals. Attrition rates for DEI roles have outpaced those of non-DEI roles at more than 600 US companies that laid off workers since late 2020, and have accelerated quickly in the last 6 months.
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Further, over 300 DEI professionals have left from these companies in the last six months. Amazon, Twitter, and Nike have shed between 5 and 16 DEI professionals each, and Twitter’s infamous diversity team layoffs are not far behind. Bearing in mind the typically small size of DEI teams – the median DEI team size in this set of companies is 3 – these outflows likely amount to the exodus of entire diversity teams.
Why is the mass departure of DEI talent such a bad sign? For one, it signals the value that companies place on making diversity and inclusion a priority for the future. More importantly, however, we see that companies with DEI teams tend to have a higher representation of Asian, Black, and Hispanic hires than companies without DEI teams.
Additionally, DEI teams boost employee morale: Companies with DEI teams experience higher levels of employee satisfaction with culture and values, diversity and inclusion, and the company overall.
- DEI roles are diminishing at a faster pace than non-DEI roles, beginning in 2021 and continuing to accelerate during layoffs in 2022. Across all companies, DEI roles tend to have more employee turnover.
- Over 300 DEI professionals have left from companies that have experienced recent layoffs, sometimes amounting to the exodus of entire diversity teams.
- Companies with DEI teams tend to have more diverse new hires, and higher employee satisfaction.