Tech Companies Are Abandoning Diversity to Satisfy Trump. It Will Hurt Them in the Long Run

This piece is part of “Ideologies of Control: A Series on Tech Power and Democratic Crisis,” in collaboration with Data & Society. Read more about the series here.

America's big tech companies claim to be leading the nation into a future of abundance, powered by artificial intelligence. But increasingly, that imagined future appears to dismiss the demographic reality that the United States is a multi-racial society, and will only grow more diverse in the years ahead. Since Donald Trump won a second term in the White House, tech firms such as Google, Meta, and Facebook have rolled back diversity, equity, and inclusion (DEI) initiatives that once symbolized ambitions for a more ethical, forward-looking industry. But moves that appear calibrated to comply with the Trump administration’s war on DEI will ultimately hurt the tech industry in the long run.

What is DEI?

Formal institutional commitments to diversity predate DEI initiatives as we know them today. Mass mobilization during the Civil Rights Movement led to the passage of the US Civil Rights Act, and activists pressured universities to define how the Act’s “nondiscrimination” mandate would be implemented in practice, particularly in hiring and admissions. During the Cold War, formal commitments to diversity were also meant to signal to the international community that prosperity is not bounded by race or gender.

Today, DEI is a term that organizations use to describe the set of policies and practices that form their organizational responses to demands for change. The specific forms that DEI initiatives take vary by company, but usually include established goals around recruiting and hiring, such as processes to manage implicit bias and homophily, employee resource groups (ERGs) for peer support and mentorship, unconscious bias training, efforts to make employee pay more transparent and equitable, and more. Other initiatives that may relate in part to DEI commitments include community partnerships or commitments to test systems for racial bias before deployment.

Many tech companies, like other corporations, introduced or bolstered DEI commitments in 2020 after the murder of George Floyd by a police officer in Minneapolis that set off a nationwide racial reckoning. Silicon Valley, on the whole, has consistently struggled with diversity; the tech industry has historically been predominantly white. Yet numerous studies demonstrate the importance of diversity, particularly in terms of race and gender, in the workplace, and that it is strongly correlated with innovation, improved decision-making, and higher profitability.

Mixed motives

Despite such evidence, executive orders issued early in the Trump administration targeting DEI spurred many companies to abandon or scale back programs. Practically, tech firms are attempting to avoid potential legal trouble, given the Trump administration’s pledge to investigate private sector companies over what it calls discrimination. And there are other possible motivations tied to the bottom line—many tech firms have business ties with the federal government, including through defense contracts.

However, while some corporate leaders appear to be engaging in anticipatory compliance, others may feel unburdened now that they no longer have to maintain these initiatives. Meta founder and CEO Mark Zuckerberg, for instance, appeared to relish the change in the political winds ushered in by Trump earlier this year as he made changes to his company’s moderation policies and ended its DEI programs.

And certainly, there must be some corporate executives who are pleased to see diversity concerns moved off the agenda; some of the most staunch critics of the tech industry are former employees who have challenged the firms based on ethical concerns, including their failures around DEI. It’s hard not to draw a connection when, for example, Google informs employees that the company will no

longer have hiring targets to improve diversity, while quietly announcing the abandonment of its pledge regarding the development of military AI.

Short-term benefits, long-term risk

But whatever short-term benefits might accrue to companies that pull back from DEI initiatives, in the longer term, tech firms may learn to regret their decisions to satisfy Trump. Undoing efforts at social progress isn't just morally wrong, it undermines the very innovation tech companies claim to champion. And it may hurt the bottom line, at tech companies and beyond. According to McKinsey, a consultancy, “companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians.”

In the long run, the future will belong to organizations that can anticipate needs that don't yet exist and solve problems that have not yet been named. This will require teams with diverse perspectives, experiences, mental models, and market knowledge. Consider some of the challenges ahead for tech firms—creating artificial intelligence that works for everyone, not just its creators; user interfaces that must be intuitive across cultures; products that serve aging populations, emerging markets, or those with accessibility needs. Homogeneous teams are more likely tow fail if these are the challenges put to them.

There is some hope that some in Silicon Valley will resist the administration’s legal threats. For example, Apple has been successful in pushing back against its conservative shareholders and rejected a proposal that sought to dismantle its Inclusivity and diversity programs. However, the company’s CEO, Tim Cook, did indicate some of its programs may need to change in the current legal landscape.

Unless leaders like Cook find more spine and men like Zuckerberg recognize their error, Silicon Valley may sacrifice its long-term viability for short-term political gains. In a world that requires understanding and a grasp of complexity, DEI is a competitive necessity.