Layoffs are disproportionately affecting people of color

Welcome to Inclusion Is Leadership, a biweekly infusion of insights, research, and guidance to create inclusive workplaces. Created by Ruchika Tulshyan, inclusive leadership advisor, founder of Candour, author of Inclusion On Purpose, and creator of the LinkedIn Learning course: Moving DEI from Intention to Impact.

How bad are the tech layoffs that seem to dominate the news? More than 118,000 people have been laid off in 2023 alone, according to Crunchbase!?

Mass layoffs are a bad strategy: the human toll alone is staggering, particularly for people who don’t have generational wealth to fall back on, are the first of their families to get a tech job and/or have had a disproportionately harder time getting new jobs because of facing bias.

For organizations: layoffs bring bad publicity, increased turnover and lower innovation, according to Sandra J. Sucher and Marilyn Morgan Westner’s HBR article, “What Companies Still Get Wrong About Layoffs.” They absolutely destroy psychological safety. I’d imagine that psychological safety for employees of color is especially low.?

While officially, we’re not seeing enough data on how it's impacting people of color, anecdotally, it’s concerning.

We’re already seeing layoffs hitting DEI jobs hard. Twitter cut its DEI team from 30 people down to only two.?

Benish Shah interviewed me for her thoughtful BBC article on this topic, “Why layoffs hit workers of colour so hard.” She highlights the lack of inclusion in the common “last in, first out” policy, as many companies have shifted their focus to including historically underestimated employees in just the last few years, so many of those “last in, first out” people who are losing their jobs are folks of color.?

There’s also occupational segregation in many workplaces—the roles that tend to hire people of color are hit harder by layoffs, such as DEI roles (as seen by the aforementioned Twitter stat).?Or lower wage, low visibility ones.

This will have long-term negative effects. Who will be advocating for inclusive hiring efforts, culture, and DEI best practices? Will people of color feel psychologically safe in their roles, or will companies lose their talent from diverse backgrounds to more inclusive workplaces? And who will monitor who is being most impacted by the layoffs?

In Sucher and Westner’s article, they write: “Companies can lose hard-won gains in their number of women and underrepresented employees through unintentional, unconscious bias that can lead managers to retain people who are like them.” As you probably already know, I’m not a fan of the term “unconscious bias,” but the sentiment still stands: if companies aren’t intentionally keeping track of layoff metrics by demographics, women of color are going to be most negatively impacted by layoffs.??

This is additionally concerning in the context of AI, as I’m reading that more companies are using AI to decide who to lay off. Algorithms are only as inclusive as the people who program them, and human biases have already been proven to make their way in, like Amazon’s AI hiring tool that discriminated against women.?

TL;DR:

Organizations taking the long view to survive won’t do mass layoffs. If layoffs are necessary, they’ll be tracking carefully to ensure people of color aren’t disproportionately laid off.? Because when the market turns around (and it will––I’ve seen it happen as a financial reporter who covered the 2008 crisis), companies and leaders with a strong, healthy, inclusive culture are best positioned to weather this storm. These organizations won’t take a short view on DEI efforts; they will continue to invest in creating a diverse and inclusive culture to survive and thrive.

When the market bounces back, I’m putting my money on the fact that the organizations best positioned to succeed are the ones that prioritized DEI through these challenging times.?

Do you agree?

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