Tech companies are putting DEI on the backburner

Tech companies have been rolling back their diversity, equity, and inclusion (DEI) efforts, with companies like Zoom, Google, and Meta cutting or totally eliminating programs and teams meant to address systemic barriers that have kept everyone from getting the same opportunities in the industry.

Why it’s happening: Tech companies in particular have been under huge pressure to reduce expenses and show profitability. The massive cuts that came as a result also included many HR and culture teams that were tasked with managing DEI efforts.

  • “Other business sectors might be trimming DEI budgets, but in tech, they're taking down the entire support system for workplace culture,” said Sarah Saska, co-founder and CEO of DEI consultancy Feminuity.
  • Some companies weren’t bought in to begin with. A survey by the Tech and People Network found that only 21% of Canadian tech companies made leadership teams accountable for DEI goals.

Big picture: Saska says some companies only started programs due to pressure from their boards, investors, or culture, without a sustained commitment. There also weren’t enough experienced practitioners to meet demand, especially in Canada. Those factors combined to make efforts at some companies less effective.

  • That opened the door for people like Elon Musk and hedge fund manager Bill Ackman to create a cultural climate questioning DEI’s effectiveness, which Saska says gave companies an excuse to cut programs they weren’t committed to in the first place.

Why it matters: Besides the morality of cutting DEI, more inclusive workplaces have not only shown better business outcomes, but are also more successful at staff retention and recruitment, both of which are big priorities for tech companies struggling to attract talent.

Bottom line: The rollback is also hitting diverse founders seeking funding for their startups. In the U.S., Crunchbase found that while venture funding fell by 37% across the board last year, funding to Black-founded startups fell by 71%.