Layoffs have recently become common in the tech industry. Topping the list of companies making cuts are hyperscalers such as  Amazon, Microsoft, and Google –  all announcing thousands of job cuts within weeks of each other – followed closely by IBM, Dell, and SAP.

With simultaneous investments in AI, some companies point fingers at automation as the reason to cut tech jobs, but research indicates most of the layoffs are centered around HR, recruitment, and diversity, equity, and inclusion (DE&I) roles.

The firing frenzy not only opens the door for cyberattackers, it threatens key efforts in DE&I and recruiting practices – just as the talent shortage reached a 16-year high in 2022, according to ManpowerGroup.

DE&I becoming a widely adopted program of enterprises was catalyzed by the racial reckonings of 2020, with initiatives jumping from 29% [2019] to 43% [2021], according to research from Glassdoor, but the first phases of the pandemic also propelled unseasonable growth for tech hyperscalers.

That growth may have triggered hollow, short-winded commitments to DE&I that are now running out of breath as economic uncertainty grows.

‘Tech Layoffs’ Target HR, Recruitment, and DE&I

Research  by 365 Data Analysis found hyperscalers scaled to a new level through the pandemic, with Amazon’s workforce growing a whopping 99% from 2019 to 2021.

Coming down from the high, those companies are now forced to adjust their workforce, and 365 found the most affected roles were within HR, accounting for 28% of total layoffs [as of January 30], noting, for example, that talent sourcing and HR positions tend to be most affected at Microsoft and Meta.

Even in cases like Twitter, Elon Musk dissolved the company’s employee resource groups (ERGs) after acquiring it for $44 billion. ERG networks have become a highly valued approach to enterprise inclusion by top-performing companies like Cisco.

“If companies are laying off staff, they will also be cutting back on recruitment, and less recruitment means less need for HR staff,” Forbes’ Bernard Marr wrote in regards to 365’s research. Furthermore, despite ecosystem efforts to promote more female employees, women were disproportionately let go [56%].

The “Tech Layoff Report 2023” conducted by Women Impact Tech and Andiamo found that women were disproportionately affected. And, while many companies are laying off 7-15% of their workforce, HR, talent acquisition and recruiting, and DE&I leaders make up between 33% and 66% of those layoffs.

“These are being reported as ‘tech layoffs’ when “they are, in large part, human resources, recruiting, and DEI layoffs,” Paula Bratcher Ratliff, CEO of Women Impact Tech told SDxCentral.

Ratliff also said that the layoffs’ gender disparities run deeper than just initial firings, as women are “finding a less hospitable job market.” The company’s report – which surveyed 1,500 tech professionals laid off in the fourth quarter of 2022 from the top 20 big tech firms – found that 78% of men have landed new jobs as compared to 63% of women.

According to Ratliff, this exposes the industry’s imbalanced access to professional networks and the interviewing bias that creates it, a sentiment strongly shared by two Accenture leaders pushing advancement for women in cybersecurity, as well as Franklin Reed, executive director of global DEI at TEKsystems.

As more layoffs are announced, Ratliff noted that companies are likely to bury DE&I shortcomings with the backdrop of anticipated recession and “efficiency measures.”

For example, Microsoft’s email to its employees claimed the 10,000 jobs were no longer needed to meet the cloud hyperscaler’s long-term goals or customer demand in light of the advancement of artificial intelligence (AI) and shuttered enterprise spending caused by economic uncertainty – despite it being one of the companies with layoffs predominantly in HR.

“We don’t foresee companies being transparent with their gender data specifically,” Ratliff warned. “As tech companies are laying off HR, recruiting, and DE&I executives, the need to highlight the gender-parity issues in tech becomes even more critical.”

Gartner Director of HR and DE&I Chandra Robinson told SDxCentral that this faltering commitment will also stress the remaining members of these teams, just as they exit a period marred by burnout, decreased work-life balance, and lower trust in leadership, according to Gartner’s research. And women were 23% more likely to feel burnout than men, Robinson added.

“Burnout has already been a continued conversation. … If your recruiting function, in particular, is being trimmed down, that will place undue pressure on your existing workforce to progress the DEI initiatives specifically,” she explained. “It's going to add responsibilities to your existing staff who are likely not going to be compensated for it.”

Robinson said while technical-role workers laid off may find work relatively quickly, she doesn’t share that optimism for workers in HR, recruiting, and DE&I.

This added workload comes at a time when DE&I leaders are struggling to get C-suite support in building a data-driven, transparent, accountable, and sustainable strategy. A Gartner survey found 51% of leaders report their top challenge as “business leaders failing to take ownership for driving DEI outcomes.”

Robinson emphasized that these setbacks will also affect access to sponsorship from many employees. “You have underrepresented employees who specifically favor remote work because they're more susceptible to microaggressions on the job,” she explained, and this creates a proximity bias that doesn’t allow for the same access to internal advancement.

For this reason, Gartner recommends consequential accountability for leaders. “This can be achieved by embedding inclusive behaviors into reward and recognition systems and specifically tying DEI outcomes to leader performance,” Robinson said, a measurement taken by companies like Trellix.

Will Hyperscalers Hone or Halt DE&I Through 2023?

Google, Microsoft, and Amazon Web Services (AWS), all have highlighted growth in DE&I  in 2022 but failed to release significant updates on how these layoffs impact the work.

Google, for instance, has committed to a 30% improvement in leadership representation from underrepresented groups – doubling the number of Black employees in nonleadership roles, and doubling the Black directors across EMEA – by 2023.

The company did not respond to SDxCentral’s request for updates to DE&I commitments after its layoffs. Google did tout progress of Black leadership, claiming a 23% last year and non-leadership up by 136%, but these metrics were realized through its YouTube division alone.

Microsoft’s recent Global Diversity & Inclusion Report 2022 highlighted last year as its strongest year-over-year increase of Black and Latinx employees – those data points were at 1.5% and 0.6%, respectively. Women representation increased by only 1.8%, despite the company’s total workforce growing by 22.1% from 2021 to 2022.

SDxCentral’s request for updates around this work following the layoffs was directed toward the company’s initial email sent to all employees.

Andy Jassy, CEO of Amazon, shared that of its roughly 18,000 employees laid off, the most impacted groups were in “Amazon Stores and PXT [People Experience and Technology Solutions] organizations,” also attributing the move to weathering “uncertain and difficult economies,” adding that long-lasting companies can’t be in “heavy people expansion mode every year.”

"Our DEI priorities have not changed, and we remain committed to building a more inclusive and diverse Amazon for the long term, ”Amazon spokesperson Brad Glasserer told SDxCentral. Glasserer referred to July 20202  message sent from Candi Castleberry, VP of Global DE&I at Amazon, to all Amazon employees.  Castleberry wrote that the company was “making good strides in DEI,” but had “much more to do.”

Forbes Tech Analyst Carolina Milanesi wrote during AWS 2022 Re:Invent that DE&I “has yet to be seen as much of a priority as sustainability, mostly, and wrongly so, because many leaders are unable to see the business opportunity it represents.”

As Milanesi points out, many executives lack a clear view of DE&I’s business-lead benefits, and the industry “is still using the same antiquated and now properly debunked pipeline excuse for the lack of diversity.”

Furthermore, hyperscalers have the wealth and budget for much less submissive commitments, according to Agatha Agbanobi, executive advisor and founder of enterprise DE&I consultancy firm Optimal Leadership.

“We will put our money behind the things that matter the most to us,” she told SDxCentral. These unbalanced job cuts are “just a lack of intentionality and a lack of real commitment” to DE&I work.

Time for the Tech Enterprise to ‘Walk Its Talk’

While companies pledged support following the murder of George Floyd, Agbanobi realized following recent incidents of police brutality, in light of layoffs, “many companies were actually silent this time around.”

This difference reveals where support falls short. Companies may invest when they think they have “time [for] ‘conversations’ that we know aren't going to actually lead anywhere because we're not talking policy, we're not talking real systems.”

But tech leaders aren’t really understanding DE&I’s crucial role in the business function of an enterprise – in performance, profitability, and in the accessibility of the technology itself.

She said that tech will always need diversity, citing when Timnit Gebru was fired from Google for pointing out AI bias, and this is far from the only account of technological shortcomings caused by homogenous development teams.

Agbanobi asked, “Do we want to wait decades for others to be served?”

Neglecting the needs and experiences of people of color and the LGBTQ+ community also cuts into profitability, she explained. 

But until leaders seek to fundamentally understand and include these perspectives, the core of enterprise DE&I will in large part remain hollow.

Gartner’s Chandra Robinson consulted with an undisclosed company that was failing to keep on track for its 2025 DEI goals, and she told  SDxcentral that these data points are coming for all companies that made pledges during the pandemic.

“They may get away with it in the near term,” but eventually “they're gonna have to have a pretty good response as to why they're not meeting those aims,” adding that the workforce priorities of younger generations will further demand “employers of choice that prioritize DEI.”

Robinson’s words echoed those of Dessalen Wood – CPO of enterprise cloud solution company Syntax – who told  SDxCentral that an age of digital transparency is allowing candidates to “shop around an enterprise’s culture and the experiences employees are having.” Candidates can easily sniff out the mendacious claims of inclusion and sift past the hype of a brand.

“What else do you offer me? If all you will offer is a brand that's going to be on my resume, a logo that's going to be recognizable, that's no longer enough,” Woods said.

Syntax’s research is finding that amidst a nearly omnipresent enterprise struggle of staffing in tech, employee happiness and fulfillment is now having to be prioritized within the value proposition of a business.

“The great thing for people looking at tech companies now is you see who really is going to walk their talk in terms of programming that might not have been seen as business critical, but as environment critical – in terms of the environment they’re creating for employees.” With unfavorable conditions quickly impacting progress, DE&I leaders in tech all say there is a lot of work to do.  And recent layoffs are creating a critical fork in the road that will reveal the companies’ commitment to that work.