- Silicon Valley and the tech industry in general are notorious for a dearth of diversity.
- Experts say that downsizing across large firms could exacerbate tech’s diversity problem.
- They advised companies to be proactive about diversity in this downturn.
The tech industry is on the precipice of a historic slump, and diversity experts say the downturn could slow or even reverse the industry’s progress in expanding employment opportunities to Black and Latino workers and people from other marginalized communities.
After a boom in recruiting, several companies have recently signaled a slowdown. Last week, Meta, formerly known as Facebook, announced a hiring freeze that it said would “affect almost every team in the company.” Cameo, a celebrity-shout-out app, and On Deck, a career-services company, cut about 25% of their workforces.
The precedent of diversity efforts in downturns isn’t pretty, said Sarah Kaplan, a distinguished professor at the University of Toronto’s Rotman School of Management. Her preliminary research indicates that when companies tighten their belts, diversity initiatives tend to fall by the wayside. “They’re seen as an HR thing — a ‘nice to have,’ but not essential for business,” she said.
What’s more, she added, research suggests that when companies downsize, they use supposedly neutral criteria that end up not being neutral at all. For instance, a company might lay off only recent hires — but if it’s newly committed to a more diverse workforce, people of color and women could be the first out the door. Another company might lay off only those with lower performance evaluations. But studies suggest that those evaluations are biased and that women and people of color receive lower ratings for the same performance, when controlling for tenure and position.
“Companies are not doing this deliberately — there are biases built into the systems in which they operate,” Kaplan said.
Kaplan and other diversity experts said companies need to be thoughtful about how they navigate this downturn with regard to diversity. “Otherwise,” Kaplan said, “there’s a big risk that the downsizing will undo what little progress has been made over the last several years.”
A notorious dearth of diversity
For years there have been calls for tech companies to hire more people from underrepresented groups. In the wake of the murder of George Floyd in 2020 and the ensuing social-justice protests, those calls grew louder. Like many organizations in corporate America, tech companies pledged to bolster their efforts to recruit, hire, and retain more Black workers.
But over the past two years, as technology companies have posted record-breaking profits and growth, many large firms have made little progress toward their goals.
In July 2020, Facebook said it was committed to increasing the share of women, people of color, and other minorities in its workforce to 50% by 2024, from about 45%. The company made no specific commitments about tech positions but described this as one of its biggest recruitment challenges. In Facebook’s most recent diversity report, from July 2021, it said Black and Latino employees made up only 2.1% and 4.6% of its tech workers, up from 1.7% and 4.3% in 2020. The concentration of nonwhite employees in nontechnical roles also leads to disproportionate layoffs.
Monica Marquez, an equity-and-inclusion expert who was formerly a Google employee, said the fact that the needle has moved so little does not bode well for the current economic turbulence. “When the numbers are smaller, it hits harder,” she said. “If a company with 100 white men and 30 people of color lays off 10% of employees across the board, it hurts the diverse community more because there’s little buffer to absorb the impact.”
Marquez said that for employees from marginalized groups, the specter of layoffs can create feelings of uncertainty that often lead to lower productivity and higher anxiety and stress. “When you’re a minority in a group of employees, you often feel like you’re an outsider,” she said. “And when you see others who look like you on the chopping block, you wonder, ‘Am I next?'”
How tech companies can be more thoughtful
Experts said that as tech companies chart a course through unsteady employment conditions, they need to be intentional about their diversity initiatives in three key ways.
First, they need to analyze what layoffs would mean for the racial and gender representation within their firms. The experts said executives should look at a list of proposed names; if they notice a disproportionate impact on one group, they should reevaluate their metrics.
They must also be deliberate about the few hires they do make during this period. Marquez said that even when companies say they’ve paused external hiring, they often make exceptions for certain roles. “They need to get the best talent, of course, but they should also take a little more time and make diverse hires.”
After all, she said, “if nobody’s hiring, there’s a surplus of diverse talent out there.”
Second, companies should tell employees about the layoffs directly and respectfully. Employees can feel betrayed when they learn about layoffs via email or social media, said Myosha McAfee, the CEO of Racial Equitecture, a DEI consultancy in the Bay Area.
She recommended executives craft an honest, empathetic message to share with HR, managers, and employees. The tone should be respectful and considerate of the people the company is letting go.
McAfee said this is crucial for both those who are losing their jobs and those who are staying — it’s common for employees who already feel out of place at a big tech company to experience guilt when their colleagues are laid off. “There’s a loss that’s being experienced, and that’s something to grieve,” she said. “There’s a way to tell a story that honors that loss.”
Finally, employers need to shift their efforts from recruitment to retention by focusing on creating a sense of belonging among their workers. Research published in the Harvard Business Review suggests that when employees feel included and feel that they belong, their engagement and productivity rise.
Marquez said companies that double down on retention will reap the benefits when economic conditions improve. “When the floodgates open up again,” she said, “they will have a community that can say, ‘This company was a safe space that helped me feel like I belong,’ and that story and culture that the organization created will attract more diverse talent.”