Dumping diversity when downsizing?
The tech industry is experiencing a major re-shift. As highlighted in Colorintech’s 16 November newsletter reasons for significant downsize includes: overambitious estimates of growth; changing interest rates and cost controls. In 2020 the tech platforms made bold anti-racist commitments to recruitment, progression and new ways of working, including remote working which has positively attracted ethnically underrepresented groups. In October’s Black Tech Fest, we discussed how Black people responded to the post-covid phenomenon of the ‘Great Resignation' and the TikTok led ‘quiet quitting’ where underappreciated employees disengaged from work to do the bare minimum. And so, in the time of mass layoffs what will the impact be for those from ethnically diverse backgrounds and tech’s bold anti-racism goals?
In this year's AfroTech a few employees anonymously shared their experiences of remote working policies being reigned in. An engineer said he had rejected an offer of employment as the company didn’t budge on their three days in the office policy. Another felt a culture of low-trust was on the rise.
Anti-racism throughout the employee lifecycle
Many organisations have shifted from shareholder capitalism to stakeholder, where employees, customers, suppliers, the environment and society are also considered, as a whole. In her book ‘The Anti-Racist Organisation’, Shereen Daniels describes a stakeholder spectrum, with centering profit on one extreme and centering people on the other. A review of the news and you’ll identify the tech firms taking a downsizing approach closer to centering profit than people. The impact on employer brand, reputation and attempting to re-recruit cruelly ejected employees, will be difficult to repair.
A study of 800 companies in 2014 found that "neutral" or colour blind layoffs removed or reduced progress made in diversity relying on a "last hired, first fired" approach. In contrast in September 2022 Twilio CEO Jeff Lawson wrote to all employees, “Layoffs like this can have a more pronounced impact on marginalized communities. So we were particularly focused on ensuring our layoffs – while a business necessity today – were carried out through an Anti-Racist/Anti-Oppression lens." Without an explanation as to how this will work in practice, for example, reassurance that an equality impact assessment will be used, this could cause anxiety for some or tension in an already difficult time. What’s clear is that this decision was an extension of the company’s anti-racism strategy.
So what does responsible downsizing mean in practice?
A 2022 Cranfield study (McLachlan, 2022) of 44 empirical articles developed a framework for responsible downsizing. Figure one below summarizes examples of best practice, including meaningful consultation; involving trade unions and transparent procedures.
Figure One. Summary of responsibilities and practices
Type of responsibility
Some examples of best practice include:
Regulatory - collective agreements; legal compliance; meaningful consultation.
Procedural - consideration of timing; procedures appropriate to demographics of workforce; transparency.
Communication - multiple channels; on-going dialogue; trade union involvement.
Employment - opportunities for internal deployment; opportunities for retraining.
Is diversity being dumped by tech firm’s downsizing? Well, whilst Twitter’s CEO, Elon Musk, has shown diversity is of little importance, for other firm’s this remains to be seen. We have seen some of our partners demonstrate continued support to Colorintech, which is reassuring. We sincerely hope that firms’ downsize responsibly, with impact assessment and mindful of the long-lasting impact each decision makes. If you’re a tech business who would like further guidance or support for responsible downsizing and continuing to embed inclusion, do get in touch.
The sense of community and solidarity amongst staff and alumni have driven some rays of positivity with many offers of support for one another. Do get in touch with stories of how your organisation’s downsizing has impacted you, the good, the bad and the ugly. You can message email@example.com Similarly, we’re developing ways to support and celebrate our Advance members over 2022/23 and beyond. If you’re not already a community member do sign up here.
Event Invitation - Colorintech are hosting their final event of the year with a WInter Social hosted by Avanade on Wednesday 14 December and would love it if you could join. Click here for more information and to book.
Christopher J. McLachlan (2022) Developing a framework for responsible downsizing through best fit. The International Journal of Human Resource Management.