Companies neglected their new DEI promises after inflation took hold. They’re making a tactical error, experts say.

Jane discovered she had lost her job as part of Twitter’s inclusion, diversity, equity and accessibility team on a Saturday night, when an attempt to log into the company’s Slack channel failed. The news was confirmed in an email early Sunday.

The demise of Twitter’s DEI team set an unhappy precedent, coming at a time when the movement to create greater equity for women and people of color in the workplace was already slowing, according to Lili Gangas, the chief technology community officer at the Kapor Center, a nonprofit that works to improve racial justice and equity in the technology sector.

While the term “woke” originated as a bit of Black American vernacular and has a decades-old history, figures on the political left today use it in reference to social-justice advocacy, while right-wing politicians and commentators often use it to describe liberal priorities or policies they don’t like. And DEI initiatives at companies have become a target of that criticism.

Nearly three years later, “I’m seeing a freeze on budgets,” she said. “I predicted this would happen, because throughout history, whenever we see an advance for social justice, the pendulum swings back.” Others say the movement had slowed almost immediately after the first wave of headlines and statements from companies and executives, and the first rush to create DEI divisions and pledge funds toward hiring more people of color and those from other historically marginalized groups.

Hispanic workers and women are overrepresented in layoffs, likely because they tend to occupy lower-paying roles that are often first to be cut. Staff at the middle-seniority level are also overrepresented, which is problematic because it’s where tech companies in particular tend to have the most diverse teams, Ayas said.“There was a lot of hiring of diversity officers without a real plan of diversifying the workforce,” she said. “You need to create a culture of belonging.

In the tech sector, for example, companies had a clear opportunity in that moment to take a key step toward adding more people of color to their workforces, he said: that is, finally allow people to work remotely and widen the recruitment pool to locations outside of centers like Silicon Valley, New York and Massachusetts, which had become unaffordable for many.

Companies that decide to abandon their DEI push when times get hard are making a tactical error, according to numerous studies that have found having a diverse and inclusive culture can give a company a real competitive edge. “An organization is not truly committed to DEI if its efforts are expendable, being based on the economy or the prominence of inequality and injustice issues in the news cycle,” Ella F. Washington, an organizational psychologist and DEI scholar who sits on the faculty of Georgetown University’s McDonough School of Business, wrote in her 2022 book, “The Necessary Journey: Making Real Progress on Equity and Inclusion.

The suits came after a string of high-profile incidents in which Black people were denied service for hours, while white people were promptly served. The company settled by paying more than $54 million — then the biggest-ever settlement under federal public-accommodation laws — and pledging to get its house in order.

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