Layoffs contribute to systemic inequities – here’s how to change that

Company leaders don’t have control over the economy, which makes it difficult to predict financial changes ahead. Downsizing may be the only option, but it isn’t an excuse to abandon your diversity, equity, and inclusion efforts completely.?

Leaders may see layoffs, budget cuts, and organizational changes as short-term solutions to keep the business afloat. But these decisions have a lasting impact on historically underrepresented employees, which results in more systemic inequities.?

Women represented about 39% of the overall workforce but 46% of all layoffs since September, according to Layoffs.fyi . Black workers make up 12% of the US workforce but only 8% of employees in tech jobs and 3% of C-Suite. This gap is likely to widen over the next decade, according to a recent McKinsey report .?

As time goes on, we’ll begin to see how current layoffs affect other historically marginalized groups that include people with disabilities, LGBTQ+ employees, and other communities.?

Related: A damaged reputation: How layoffs affect your employer brand

Why are historically underrepresented employees affected the most??

Once you look at the unemployment numbers and see which groups are most affected by layoffs, the next question is why is this?

There are two possible explanations:

Last in, first out: This idea suggests that the most recent hires are the first to be let go when it’s time to downsize. Women and people of color often fall into this category, especially for companies that actively recruited more underrepresented talent over the last few years after making big promises to increase DEI efforts . People of color and women are also more represented in entry-level roles compared to leadership roles . This means new hires don’t get a chance to develop professionally and build seniority before it’s time to make cuts.?

Non-technical roles are cut first: When it’s time to cut budgets, DEI, HR, recruiting, sales, and marketing are often cut first. More women are in HR, recruiting, and customer-facing roles compared to other departments, like engineering,” says Roger Lee, creator of Layoffs.FYI, in an article with Fast Company . Lee suspects to see the same pattern once data is available on how recent layoffs affect other historically underrepresented groups.

What is the solution?

It’s up to company leaders to create systems that give diverse employees the same opportunities to advance professionally. While there’s no way to 100% recession-proof your company to prevent layoffs, it is possible to keep your commitments to DEI while downsizing.?

Below are questions leaders can reflect on when downsizing, cutting budgets, and making organizational changes.

• Address your implicit biases: Is your decision to cut employees or departments strictly based on performance? Do you feel the need to protect certain employees because of your relationship with them? Do you feel more comfortable cutting new hires because you haven’t developed a relationship with them? How are you communicating these changes to employees? It’s essential to look at which demographics you’re cutting and why you’re cutting them.
• When hiring new employees, be open-minded about their employment gaps: Are you evaluating candidates based on their skills and value, or their work history? For women and people of color who have experienced multiple layoffs throughout their careers , you may see frequent job changes or gaps in employment. Remember that these changes can be a reflection of a company or the economy rather than the candidates themselves.?
• Identify how your company is maintaining an equitable and inclusive work culture: Do you know how remaining employees feel about your company culture after layoffs? Are they disengaged because of their job security? How are you providing diverse employees with professional development opportunities? Are you supporting belonging communities such as Employee Resource Groups? This is the time to focus on your people.?

Related: Here's how managers can prevent employee burnout during layoffs .

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