Layoffs have hit the tech industry hard, with nearly 170,000 job losses in 2023 alone. More people have faced layoffs in the first few months of this year than in 2022. Unfortunately, these layoffs disproportionately impact minority communities, exacerbating inequalities and creating a devastating ripple effect, says Dr. Liz Kofman-Burns, co-founder of DEI consultancy, Peoplism.
For instance, a ProtocolOpens a new window report found that during massive layoffs, like the one Netflix had in early 2022, women, BIPOC, and LGBTQ+ employees made up a huge portion of those who were let go.
Meanwhile, Twitter faced legal action at the end of last year on the premise that Elon Musk unfairly targeted female staff.Â
So why do layoffs disproportionately impact minority groups, and what hardships do they face after being laid off? Moreover, how can HR teams know whether a layoff decision was biased?Â
Possible Reasons Layoffs Disproportionately Impact Marginalized Groups
There’s evidence that layoffs, including recent tech layoffs in the US, disproportionately impact women and minority employees. We don’t know whether minority communities are always the first or the majority to be laid off in every case, but the trend overall is very problematic. There are several possible reasons marginalized groups are disproportionately impacted when it comes to layoffs: bias, lower tenure, lower job levels, lack of access to sponsors, and more can all play a role.
Let’s look at those in a little more detail.
- Bias: Even when companies try to identify an â€˜objective’ measure for layoffs, like performance reviews, we should carefully consider how bias may play a role. For example, when it comes to performance reviews, Textio found women and minorities are more likely to get personality-based and low-quality feedback, which can impact performance evaluations and career opportunities.
- Lower tenure: Fortunately, companies have become increasingly diverse in recent years. However, that means that employees from historically underrepresented groups are more likely to be recent hires than those with greater seniority. If you lay off employees based solely on tenure, you may quickly wipe out many historically underrepresented employees.
- Lower job levels: White men are still significantly overrepresented in higher job levels compared to their overall representation in the workforce. Often, the lower-level of companies are more balanced in terms of demographic diversity. If you focus layoffs on lower-level roles, you are likely to impact underrepresented employees disproportionately.
- Lack of access to sponsors and leadership visibility: According to Harvard Business Review, underrepresented employees face greater barriers to accessing sponsors, who can provide critical professional connections and job opportunities. When layoffs occur, employees with sponsors are often protected from job loss, leaving those without sponsors more vulnerable. Underrepresented employees are also less likely to have access to high-potential development opportunities that make them visible to company leadershipÂ (in fact, 51% of people leaders saidOpens a new window the way their organization currently selects employees for professional development opportunities gives some an unfair advantage), and potentially more likely to be spared a layoff.Â
The bottom line is that, in general, people with greater access to power will be more likely to keep their jobs in a difficult economy. Ironically, people with power are also the best able to withstand a layoff because they have more access to networks and financial resources. That’s why companies must consider the impact of layoffs and examine what biases may be at play.
How and Why Experiences of Being Laid Off Can Be Especially Challenging for Women and Minority Communities
Layoffs’ negative impact can also be magnified for women and minority groups. For instance, on average, women and people of color typically have less wealth than their male and White peers. So on a basic financial level, layoffs will be more painful for women and minority communities.Â
We also know that people’s networks are essential for finding jobs, and our networks tend to be quite homogenous, making it more difficult for minority job candidates. Research has shown that biases exist in the job search process, from resume reviews to interviews, which further adds to the difficulties faced by minority job candidates. Overall, the negative impact of layoffs can be magnified for women and minority communities, both financially and in terms of finding new employment opportunities.
Mass Layoffs Are Damaging to DEI Efforts in the Tech Sector
EEOC data shows over 83%Opens a new window of executives in the US tech industry are White, indicating a lack of diversity at the highest levels of leadership. When women and minority groups are among the first to go during staff cuts, DEI progress is slowed, and industry-wide inequities persist. This can lead to losing valuable perspectives and experiences critical for innovation and growth in the tech industry.Â
Despite some progress and investments made by tech companies in the last several years, we are already seeing how quickly bias can return when proactive DEI initiatives are abandoned. Kieran Snyder, CEO of Textio, for example, has found that in the last few quarters, gender bias and problematic language have increased dramatically at companies like Meta, Microsoft, and Amazon.
Furthermore, layoffs can also negatively impact morale and retention rates among underrepresented groups in the industry. This is because they can create an atmosphere of uncertainty and anxiety, which can stir up already-existing feelings of isolation and exclusion that some minority groups may experience in the tech sector. As a result, companies may find it more challenging to attract and retain diverse talent in the future, which can further perpetuate the need for more diversity in the industry.
How HR and Leadership Teams Can Identify Layoff Bias
The first step is to look at the demographic breakdown of your layoffs. Suppose you find that employees from underrepresented groups are more likely to be identified for layoffs. In that case, you should examine whether there is a fair explanation or if bias or discrimination plays a role. Bias can be subtle and unconscious.Â
For example, if your guiding principle for layoffs is based on a factor like performance reviews, but you made a few exceptions in â€˜special cases,’ you should be looking at who is benefiting from those exceptionsâ€”and who isn’t. It’s well worth having a committee (that, crucially, is diverse in make-up) review all layoff decisions specifically to look for potential biases.
Do you think layoffs have impacted minority groups more? What steps have you taken to handle layoff bias? Let us know on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window . We’d love to hear from you!
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