It’s difficult enough to deal with underrepresentation in the workforce. A swath of global layoffs is making life difficult for people of colour – and jeopardising their advancement.
Underrepresentation, fewer paths to success, and a lack of institutional support are just a few of the challenges that people of colour have faced and continue to face in nearly every industry. Following decades of non-diverse hiring practises, many workplaces, including large tech firms, have only recently opened up about the lack of diversity in their workforces.
Companies have recently invested billions of dollars in diversity and inclusion initiatives to address long-standing inequities and increase representation of marginalised workers. According to data, the majority of these investments, particularly in technology, occurred in the aftermath of the Black Lives Matter movement in 2020. Many of these initiatives yielded promising results; for example, prior to Elon Musk’s acquisition of Twitter in late 2022, The company received positive press for hiring more black employees, with the percentage increasing from 6.9% to 9.4% in US locations. The same year, Cisco, a US-based telecommunications conglomerate, reported a 120% increase in black vice presidents, exceeding diversity targets set for 2023.
However, amid global layoffs, these diversity efforts, as well as workplace representation for people of colour in general, may be stalling.
According to a Revelio Labs analysis of publicly available data for 2022, black and Latino workers accounted for 7.42% and 11.49% of tech layoffs in 2022, despite accounting for only 6.05% and 9.96% of the industry, respectively. Netflix laid off 150 employees in May 2022, with Protocol identifying 26.6% of them as workers from underrepresented backgrounds.
While these figures are useful for tracking the impact of layoffs on diversity in some organisations, there is insufficient publicly available data to confirm that employees of colour have been laid off in greater numbers than their white counterparts overall. However, hiring patterns and layoff policies, as well as data on shrinking diversity budgets, Many marginalised workers are struggling as a result of corporate cuts, according to equity and inclusion (DEI) resources.
Last in, first out
Several companies have implemented layoff policies that use position and tenure as cost-cutting determining factors. Many of these policies were implemented in the aftermath of a series of high-profile gender and racial discrimination lawsuits filed against companies such as Google, Uber, and Riot Games in 2018.
Although the stated goal of these layoff policies is neutrality, targeting employees with less tenure and seniority makes workers of colour statistically more likely to be let go, especially in companies that have only recently focused on diversity-focused hiring. These jobs are more likely to be cut in a ‘last in, first out’ layoff policy.
Targeting employees with less tenure and seniority makes workers of colour statistically more likely to be let go, particularly in companies who homed in on diversity-focused hiring only in recent years
According to Alexandra Kalev, an associate professor of sociology and anthropology at Tel Aviv University, this approach to layoffs has a negative impact on underrepresented workers. While some data suggests that workers of colour have made progress towards C-suite representation, many of them are new hires and thus vulnerable to tenure-based layoffs.
“Companies are still making those decisions, and reflexively saying [the] last people in should be the first people out,” observes Corey Jones, co-founder and chief creative officer of PrismWork, a workplace cultural transformation consultancy.
Jones and his PrismWork colleagues Daina Middleton and Rebecca Weaver recently co-authored a Harvard Business Review article. in which they made the case that savvy companies should “embed DEI efforts into every state of the employee lifecycle¬ – including separations”. Layoffs should not disproportionately affect marginalised employees, the authors argue, if a company is genuinely committed to inclusion.
Layoffs present a dual set of challenges for workers of colour. After overcoming a higher initial barrier to entry than their white counterparts, finding a new job after a layoff – particularly in STEM careers – can be difficult. When people of colour are laid off and unable to find new jobs in their fields of choice, it harms a growing network of professionals who provide mentorship and connections to these job seekers.
According to a 2023 study on the State of Inequity in the Workplace from the US-based diversity-advocacy organisation Hue, one in every two workers of colour do not have the professional connections to get the job they want. “It will take longer to recover for workers of colour as the economy begins to stabilise,” says Fahad Khawaja, founder and CEO of Hue. “As jobs begin to become available again, you will be at a disadvantage, making it even more difficult to get back on equal footing with others.”
All of these factors can combine to cause significant layoff anxiety for workers of colour, who feel especially vulnerable in a shrinking labour market. “Nearly 30% [of black, indigenous, and other minorities] “[People of colour] are worried about being laid off or fired in the next month,” says Khawaja. “And it rises as more intersections are examined. It is 35% for Latinos or Latinas, and 35% for Asians. However, it is nearly 40% among LGBTQ+ people of colour.”
The dismantling of diversity, equity, and inclusion initiatives is another major issue for workers of colour facing layoffs. Lyft, for example, eliminated its diversity and inclusion teams after laying off 13% of its workforce in Q4 2022. An analysis by Revelio Labs revealed that companies cut DEI positions “at a faster pace than non-DEI roles, beginning in 2021 and continuing to accelerate during layoffs in 2022” .
Middelton, chief strategy officer at PrismWork, observes that companies have abandoned their 2020 diversity commitments. “There was a real focus on DE&I initially, then it was ‘we’re past that, no more DE&I, not important anymore, not a priority,'” Middleton says.
According to experts, these programmes are being implemented in many cases. reduced because companies commonly cut positions that aren’t considered ‘revenue-generating’. According to a ZipRecruiter analysis, workforce reductions disproportionately impacted recruiters, HR, marketing, and sales professionals. These roles, often referred to as “occupational segregation,” are frequently filled by underrepresented workers, according to Ruchika Tulshyan, author of Inclusion on Purpose. Furthermore, emerging data shows that the majority of the diversity officers who remain employed are white.
These factors can have a negative impact on remaining employees’ morale. “It undermines a sense of belonging, may cause your remaining employees to question whether they are aligned with the company’s values, and may appear arbitrary and unjust,” says Tanya Tarr, a behavioural scientist and president of Cultivated Insights, an executive learning and development firm.