Tech company profits and stock prices rose to new heights over the past two years—but the industry’s pandemic-proof confidence has now turned sickly. Economic worries have prompted tech giants and startups to cut costs, freeze hiring, or even begin layoffs. Last week, The Washington Post reported that an internal memo at Meta encouraged managers to identify low performers to eject, as the tech giant, like many others, prepares for leaner times.
“It reminds me of the dot-com bust—the very first tightening of the belt, reining in the exuberance,” says Coco Brown, CEO of the Athena Alliance, a networking organization for women executives in business, including tech and venture capital. That means tech companies will offer less generous salaries and fewer office perks—and likely have less diverse workforces.
People working to improve diversity in tech are worried that companies looking to cut costs may end up undoing the modest progress they have made toward diversifying their workforces through hiring more women, LGBTQ people, and people of color.
That’s because many times the roles that historically underrepresented groups are hired into tend to be seen as the most expendable, says Sarah Kaplan, director of the Institute for Gender and the Economy at Rotman School of Management at the University of Toronto.
When her students are hired into technical positions, Kaplan has noticed that women are offered less prestigious roles. “A male engineer will get hired into a coding job, and a female engineer will be hired into a user interface job, where coding is seen as one of the most high-status positions,” she says. “Even as companies have tried to make progress, that progress has not always been in the highest status and most highly compensated areas.”
A 2018 Pew Research study found that the tech industry is one of the least diverse areas of the STEM fields. In the same year, Google reported that only 2.5 percent of its workforce identified as Black and 3.6 percent as Hispanic and Latinx.
In 2020, in the wake of George Floyd’s murder, The Plug, a media and research company focused on the Black tech ecosystem, found that some 200 tech companies promised to make greater efforts toward diversity, equity, and inclusion. There have been modest gains—Google’s most recent diversity report shows that 5.3 percent of its workforce are now Black and 6.9 percent Latinx—but Kaplan says the figures tech companies offer to measure diversity can make it hard to truly know whether substantial change is being made.
For instance, figures released by Amazon reveal that the most diverse level of the company is also the lowest, categorized as “field and customer support.” “All of [Amazon’s] diversity is in their warehouse operations,” Kaplan says. “Companies that have big cafeterias and things like that often are counting their cafeteria staff, and [those jobs] would be more likely to be populated by underrepresented minorities or people from lower socioeconomic groups.”
Certain departments at tech companies outside engineering, such as business development, customer success, communications, and marketing, also tend to be more heavily stacked with women and historically underrepresented ethnic minorities. Brown says these types of roles have garnered increasing respect and prominence in recent years. But Mimi Fox Melton, CEO at Code 2040, a nonprofit that helps early career Black and Latinx technologists advance in the industry, says individuals in these roles are still more likely to face layoffs because they are seen as less essential to the business than those who develop or maintain the product.
“Most of the time, you see BIPOC candidates being hired into the HR and recruitment space,” says Fox Melton. “But in a hiring freeze, you don’t need as many people recruiting candidates, so those people will face layoffs.”
Kaplan also told WIRED that managers often don’t take into account how processes used to identify workers or roles to eliminate may be biased against certain demographics. “Even systems that are designed to be neutral end up disadvantaging women and people of color,” she says. Research has shown that in performance reviews, women and especially people of color are often rated lower for similar performance than their colleagues, making them appear to contribute less than they really do. Choosing to lay off newer employees and protect those who have demonstrated loyalty by staying at the company for several years might sound reasonable in theory, but in practice Kaplan says this method would put people hired as part of more recent pushes for diversity on the chopping block.
“In their early growth stages, most companies hire by referral,” says Fox Melton. “We know that 75 percent of white people have all-white networks, meaning that companies are more likely to be hiring more and more white people early on.”
Tech companies’ efforts to bring workers back to their luxe offices may also end up reducing workforce diversity. The remote work revolution prompted by the pandemic helped companies seeking to bring in employees from underrepresented backgrounds, says Bhaskar Chakravorti, dean of global business at the Fletcher School of Law and Diplomacy at Tufts University. Meta’s most recent diversity report acknowledged remote work as a key factor in bringing in a more diverse pool of talent.
“When companies hire more diverse people from places like Atlanta, or in Texas, or the South they can retain them because they’re allowing them to work close to their social networks, and their homes, and their communities,” Chakravorti says. “And that helps employees of color because they feel that they don’t have to move to a city like Boston, which is quite alienating for a lot of employees of color, because it’s not the friendliest environment.”
With many tech companies, including Google, now pushing workers to return to the office, Chakravorti says some women and BIPOC employees are choosing to leave of their own accord. Women still do the bulk of household management and childcare, and while remote work doesn’t guarantee equality, a survey conducted last year by FlexJobs found that 68 percent of women would prefer to continue to work remotely, with many citing work-life balance. Being required to return to the office threatens to throw off that balance. “It is making it harder for women,” Chakravorti says.
A survey of knowledge workers last year by workplace chat tool Slack found that 97 percent of Black knowledge workers wanted either hybrid or totally remote work permanently, compared with 79 percent of white workers. Many Black people said they found working from home to be less stressful, partly because it did not require them to code switch between different social contexts. “If the choice is between being in an office environment where I have to experience daily microaggressions and working from home, I am going to choose to work from home,” says Fox Melton.
Chakravorti says that while it may feel more comfortable, remote work can also disadvantage women and employees of color because it’s white and male managers who are often most eager to spend time in the office. When those managers later choose who to delegate important projects to, they’re likely to be susceptible to “proximity bias.” “Of course, it’s the folks who are right there in front of the project lead,” says Chakravorti. “Then 12 months later, who gets promoted? It’s the person who was given the responsibilities in the first place.” In other words, hybrid work arrangements that people from marginalized groups may favor can end up reinforcing those group’s existing disadvantages.
Fox Melton says that although she too is worried that layoffs and hiring freezes could undo years of work to diversify tech, she also believes companies can resist that pattern if they choose. “The tech companies we work with have shown a sustained interest in our candidates; we haven’t seen a decrease in demand,” she says. “Companies that are really committed to diversity understand it can’t just be a ‘strong economy’ commitment.”
