Big Tech layoffs reduce minority hires, deem affirmative-action push as costly goal during inflation

Amazon and Walmart are among hundreds of corporations that have started eliminating diversity, equity and inclusion positions as inflation raises the costs of affirmative action hiring.

Big Tech layoffs have fueled a 33% turnover rate for DEI employees, compared with 21% for non-DEI positions, a study from Revelio Labs has found. The workforce data agency’s report is among several showing sudden cuts in corporate affirmative action programs less than three years after a surge in response to racial justice protests.

“It signals in many ways that some of these DEI missions by companies were just smoke and mirrors, a stunt, marketing talking points,” small business owner Brittany Pogue-Mohammed Acosta, a former DEI employee, told The Washington Times. “And that no real work or progress was done.”

Ms. Acosta owns the New York City-based Mosaic the Label, which bills itself as “the only online store founded by a biracial female entrepreneur and mother that strives to empower and uplift other mixed minorities.”

“These issues still stand and need to be addressed,” she said. “But they need to be addressed daily and not just when a newsworthy event occurs.”

“Many corporations felt obligated to do something post-George Floyd when companies were making bold statements about their commitment to diversity,” added Tyrone C. Howard, a UCLA education professor specializing in racial equity. “But these positions were precarious from the start, with little security, direction and resources.”

Over the past six months, more than 300 DEI professionals departed companies that conducted mass layoffs to cope with a slowing economy, the Revelio study found. Amazon, Twitter and Nike shed five to 16 DEI professionals each.

The departures “likely amount to the exodus of entire diversity teams” at some companies, Revelio said.

Another factor: The growing number of states that have moved to ban DEI training in the public sector.

“Companies do not want to be accused of being part of the woke culture,” Mr. Howard said in an email.

“I think a lot of the credit for this phenomenon should go to [Gov. Ron] DeSantis of Florida, [Gov. Greg] Abbott of Texas and to the Republican-dominated statehouses of about 15 other states who have come out against DEI,” said Walter Block, an economist who teaches at Loyola University New Orleans.

The cuts show companies lacked “commitment to actually doing the work” and never really embedded DEI initiatives “into the fabric” of their organizations, said Eugene Dilan, a California-based DEI business consultant.

“It is clear that DEI was never weaved into their strategies,” Mr. Dilan said in an email. “Sadly, it is still often more of a marketing ploy to gain talent or public favor or perhaps even an emotional reaction stemming from white guilt.”

None of the companies cited in the Revelio study has responded to a request for comment.

Their silence about reducing DEI positions is unsurprising in the current political and economic climate, said Michael Warder, a California-based business and nonprofit consultant.

“As DEI terminations become publicly known, those companies may be subject to protests at shareholder meetings as well as street demonstrations. These possibilities must have been taken into consideration when corporations analyzed the value proposition of terminating DEI employees,” Mr. Warder, a former vice chancellor at Pepperdine University, said in an email.

As corporations lay off DEI workers, the percentage of minorities they hire has likewise dropped.

Revelio found that diverse hiring fell by 7.13% over the past six months at TripAdvisor, the company with the sharpest decline. The next-steepest were a 5.81% drop in minority hiring at Glassdoor, a 4.16% decrease at Wells Fargo and a 3.35% decline at American Airlines.

At Walmart, the share of people of color among new hires fell by 3.15%.

The DEI cuts signal a return to colorblind hiring, according to conservative shareholder activists who presented unsuccessful proposals against corporate affirmative action at dozens of board meetings last year.

“Public corporations are finally realizing, as tough times take hold, that DEI positions are luxuries, and destructive luxuries at that,” said Paul Chesser, director of the National Legal and Policy Center’s Corporate Integrity Project, which buys shares in companies. “Hiring quotas and ’cancel culture’ are two of the tools in the toolboxes with which race baiters and gender activists seek to tear apart the fabric of companies, extracting concessions and contributions to their groups while productivity suffers.”

But others point to studies touting the benefits of DEI recruiting, staffing, talent development and retention.

“The accumulated evidence shows that organizations that prioritize DEI-supportive practices have better innovation and performance on average,” said Maurice Cayer, a former corporate executive and Fortune 500 business consultant who teaches human resources at the University of New Haven. “And having capable people in DEI roles increases the likelihood that those priorities will be turned into reality.”

Companies in most industries expanded their DEI teams to boost minority hiring after George Floyd’s death in police custody triggered mass protests nationwide in the summer of 2020. College and corporate training programs showed similar increases for DEI roles.

The fourth most trending career last year was “experts in workplace diversity,” software giant Adobe found in a survey of 750 people hired in the previous three years and an analysis of the latest job postings on the career website LinkedIn. That included diversity officers, managers and coordinators.

U.S. companies spent $9.3 billion on DEI programming last year, according to consulting firm StrategyR, and economists estimated that this number would grow to $15.4 billion by 2026.

Inflation and the threat of a recession are reducing the likelihood of such growth, said Andrew Crapuchettes, CEO of Idaho-based recruitment agency Red Balloon.

“All the virtue signaling in the world cannot forestall the economic realities of a slowing economy,” Mr. Crapuchettes said. “In a time when bloated Big Tech companies must make budget decisions, it’s no surprise that divisive and polarizing DEI programs are under scrutiny.”

Listings for DEI jobs have decreased by 19% since last year, more than human resources or legal jobs, LinkedIn reported last month.

Part of the reason is that DEI jobs eat into corporate profits rather than add to them, according to shareholder activists at the National Center for Public Policy Research, another conservative group.

“DEI salaries are paid to workers who work to ensure that hiring and promotion occurs on grounds other than merit,” Scott Shepard, director of the center’s Free Enterprise Project, said in an email. “As a result, exactly when DEI employees are successful, they cost the company because hiring on grounds other than merit and success will always reduce productivity.”