How Layoffs Destroy DEI

When organizations are cutting back, the junior levels and cost centers are the first places that they look to trim. While this seems like a logical business decision, not enough is considered beyond the employees’ wage costs, roles, and functions. This inconsideration for the people behind the positions can effectively wipe out diversity in one fell restructuring swoop.

In order to uncover how organizations end up in a spot where they are self-sabotaging their own DEI, we need to look at how they’ve hired and how they develop their employees. The statistics unfortunately show us that organizations are under-employing women and minority groups with with studies and reports showing that:

• Women represent 56% of frontline jobs and are 14% less likely to be promoted than their male peers
• Black employees hold only 7 of every 100 manager roles versus their white counterparts, who hold 66
• LGBTQIA2S+ only represent 0.3% of leadership positions at Fortune 500 organizations, an issue referred to as the “Rainbow Ceiling”
• Disabled people are less likely to work in leadership than their non-Disabled peers with 36.3% of employed Disabled people holding management roles versus 43.3% of non-Disabled employees

With women and minority employees holding so many of an organization’s entry and junior-level positions, a layoff at these levels can completely obliterate any diverse representation.

This impact is only bound to get worse. With the continuous emergence of new technologies like artificial intelligence tool ChatGPT, eliminating junior roles, like call centre positions, will be even easier. 

How to Protect DEI During Layoffs

This does not mean every reorganization is doomed to destroy DEI efforts. But it does mean that it’s imperative for organizations to engage in different and better planning before a layoff is even on the table.

Listen to and Uplift Minority Voices

While it’s not the job of your minority employees to educate leadership on their experiences, your organization should be proactively engaging minority employees authentically and responsibly.

Employee resource groups are often a place to start. But in order to be effective, there must be adequate resources and budgets allocated to help these groups develop and thrive.

There should be proper representation of women, BIPOC, LGBTQIA2S+, and Disabled employees at all levels of leadership, including reorg decision-makers.

It’s OK to not have the answers. Which brings us to our next point…

Work With a DEI Consultant

Hiring a DEI consultant can be one of the best investments your organization can ever make. There are many talented DEI consultants who can help your organization preserve DEI efforts. As much as possible, make it a team effort to identify the best consultant for your business, and verify their expertise through references and review any available case studies.

Design a Neutral Reorg

While a layoff based on roles can seem neutral, as we’ve already identified, laying off particular functions can be a faulty approach. 

Though imperfect because of the subjectivity of employee reviews, one of the ways to keep the layoff as neutral and objective as possible is to look at performance data. Rather than looking to trim entire teams at the same level, look to pluck out employees who aren’t performing to certain data-driven benchmarks.

Deliver Equitable Transition Supports

A way that organizations often pour salt in layoff wounds is by providing transition services – namely outplacement – to a select few, senior people.

This will only continue to damage an organization’s reputation, particularly regarding their commitment to DEI. Entry and junior-level employees’ experience with your business often disproportionaly shape online (Glassdoor and Indeed) reviews.

Our outplacement program at First30 is cost-effective and well-suited to serve many career levels, particularly entry and mid-level, at scale. This means that none of your exiting employees should be left without support.

Layoffs certainly do happen, but destroying your DEI in the process is something that you can work to avoid.

If your organization is planning a reorganization and is looking for support with transitioning employees, you may wish to consider our outplacement services. Our pricing starts at $500 (plus taxes) per participant, and 90% of our participants are back to work within 3 months! If you’re interested in First30’s outplacement services, feel free to send us an email!

Download our outplacement brochure with pricing HERE.