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Notes -
Meta ends its DEI program (internal memo, Ars Technica verification). The company is disbanding its DEI team. It will no longer use "diverse slate hiring" (intentional seeking-out of candidates of particular underrepresented minorities). It is "sunsetting our supplier diversity efforts", which probably means that they will no longer privilege minority/women-owned suppliers.
It is ending the perception that it has representation goals. Yes that's convoluted, but how else does one interpret this statement:
The stated reason for the shift in policy:
That is, they expect to no longer be sued based on "disparate impacts", but possibly sued based on preferential treatments. This... makes sense for a company to do. McDonalds is doing it; Walmart did it more than a month ago.
I expect more companies to follow suit (quietly or loudly). My question is: are there any corporate for-profit true-believers who will stick with the DEI initiatives? Ben and Jerry's, maybe?
One thing that is important to keep in mind is that there was a little cottage industry in the academic literature that strained to try to prove that diversity initiatives were actually supported by a simple business case, that increasing diversity would increase performance and increase profits. There were plenty of lit spats about such claims. But some folks still believe genericized versions of it.
The kind of funny thing is that a lot of those same people are the ones who are now saying that these companies are cutting such programs now just to make more money. If one truly believes that DEI programs increase performance/profits, then they should believe that cutting DEI programs decreases performance/profits. Thus undercutting at least one of their two rationales.
One would think that some set of these large companies who adopted such programs ≅4yrs ago would have seen their performance indicators and profits taking off. They'd be saying, "We can't cut this; it would cost us too much money." Instead, I think the much more likely interpretation is the one that is supported by the current claims, not the former claims - lots of companies adopted these programs in the wake of George Floyd; some were just trying to play the PR game, others may have legitimately believed the predictions of increased performance/profits. ≅4yrs later, they've seen that the magical increased performance/profit simply hasn't materialized, the political pressure is decreased, and they now, indeed, want to save some money.
I think a lot of these companies were being told by big consulting firms like McKinsey that these strategies would open new markets and bring them a lot of money, and the companies genuinely believed them. They started cooling off on DEI and the Modern Audience when the promised returns never materialized.
Usually this comes up in discussions of management consulting firms making a guest appearance to recommend layoffs—but stereotypically, management consulting firms like McKinsey/BCG/Bain ("MBB") are used by the managers of industry companies not for their novel insights nor research.
The stereotypical role of management consulting firms is to Read the Room and make suggestions for things company management already wanted to do, and to lend an air of credibility and serve as a scapegoat for the consequences of any decisions that are made. It's not like management consulting firms have any specialized knowledge or brilliant insight that would make industry management go "ohh... squeeze the costs and juice the revenue, why didn't I think of that?" drake_lil_yachty.gif
Sometimes young consultants will tell you this as well. After a few years (or even months) in management consulting their cynicism is sufficient that, regardless of the (lack of) inherent value-add of their research and analyses, they see it as a good career path for those with just Excel and PowerPoint monkeying skills and are broadly smart, with great compensation and exit opportunities (and investment banking was too hard to get into and/or too many hours). "It ain't much, but it's honest work." Well, mostly honest.
And even when not serving as water-carrier for industry management, the research of management consulting firms is usually basic and pandering as fuck. For example, "Return-to-office mandates: Women, minorities hardest hit".
Industry management typically have decades of experience (at least intermittently) interacting with management consulting firms, and many have oftentimes done a stint in MBB themselves, so they should be red-pilled as to the "thought leadership" of management consulting firms.
This is not to say that management consulting firms are worthless, so to speak. Being a lubricant for corporate decision-making can be value-add in and of itself, even if you're unable to deliver ground-breaking insights.
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