Oceans absorb 90% of the heat from climate change — here’s why record ocean temps are so harmful
This picture of the Pacific Ocean was taken by the International Space Station orbits into in April 2022 from 261 miles up.
Photo courtesy NASA
The oceans of the world absorb the overwhelming majority of the heat caused by global warming, creating serious consequences for life in and around them, including humans.
“The oceans do a lot of the work in reducing the level of warming,” Baylor Fox-Kemper, professor of earth, environmental, and planetary sciences at Brown University, told CNBC. “Over 90 percent of the excess energy on earth due to climate change is found in warmer oceans, some of it in surface oceans and some at depth.”
The oceans cover 70% of the earth’s surface, and water can absorb tremendous amounts of energy.
“Water has a huge heat capacity, which means that it takes a lot of energy to change the temperature of water,” Carlos E. Del Castillo, head of NASA’s Ocean Ecology Laboratory, told CNBC. “Do the mental experiment. Put two pots on a stove. One with water, one without. Both on high. Wait one minute. If you touch the water, you will barely feel a difference in temperature. If you touch the metal of the empty pot you will burn. This is because the heat capacity of water is way higher that that of a metal.” Castillo admitted the science is a bit more complicated that this mental thought exercise, but it helps visualize the idea of heat capacity.
That shows “why a small change in temperature in the ocean” means the oceans have been absorbing massive quantities of heat, Castillo said.
Record temperatures of 101 degrees in the ocean off the coast of Florida is one more example of the increasingly obvious effects of climate change. NASA on Monday said July was the warmest month in its record books dating back to 1880.
“The warmer ocean that we are seeing now represents a ratcheting up of the climate change signal,” Benjamin Kirtman, professor of atmospheric sciences at the University of Miami, told CNBC. “This is consistent with a continued increase in extreme weather in the climate system, that is more heat waves and marine heat waves, droughts in already dry regions, floods in already wet areas, extreme winds, and fire.”
The more greenhouse gasses we emit, the hotter the oceans will get.
“Greenhouse gas warm the entire climate system including the ocean. Put simply, the greenhouse gases serve to trap more heat, some of which is absorbed by the ocean,” Kirtman told CNBC. “So, as greenhouse gas concentrations increase, we expect the ocean to absorb more heat and warm.”
By the numbers: Record highs and big-picture trends
Daily global sea surface temperature in degrees Celsius for the ocean waters between latitude 60 degrees to the South and 60 degrees to the North, with a line for each year starting in January 1979 to July 2023. The years 2023 and 2016 are shown with thick lines. The other years are color coded by decade, with the 1970s in blue and the 2020s in brick red. The chart was made by and is shared with the courtesy of Copernicus, the the Earth observation component of the European Union’s Space program.
Copernicus
The global average sea surface temperature hit an all-time record high of 69.73 degrees Fahrenheit on July 31, according to a data set maintained by Copernicus, the the Earth observation component of the European Union’s Space program, which goes back as far as 1979. This particular data set measures temperatures at about 33 feet below the surface of the ocean.
“Global” in this data set is defined as the oceans beyond the polar region, between 60 degrees latitude south and north. Measuring sea surface temperatures in this extrapolar region is considered standard for climate monitoring, but the sea surface temperature among all ice-free oceans also reached a record-high level in July, Copernicus said.
The previous record was set in March 2016 — March is the time of year when oceans in the southern hemisphere get warmest, and because the southern hemisphere has more ocean it tends to be the hottest peak of the year, Gavin Schmidt, director of the NASA Goddard Institute for Space Studies, told CNBC.
In addition to the daily record on July 31, the monthly sea surface temperature for July was the hottest July on record, “by far,” Copernicus said. The anomaly for July, which is a measurement of the difference between what the sea surface temperature was and a long-term average for that month, was 0.92 degrees Fahrenheit, according to Copernicus.
Sea surface temperature anomalies displayed in degrees Celsius, compared to a 1991-2020 reference period, averaged over the extrapolar global ocean for the month of July from 1979 to 2023. The chart was made by and is shared with the courtesy of Copernicus, the the Earth observation component of the European Union’s Space program.
Copernicus
These record sea surface temperatures arise from multiple factors, including the El Niño weather pattern, which is currently in effect. “The particularly warm waters this year have to do with climate variations like El Niño in the Pacific and a similar pattern in the Atlantic on top of the steady ocean warming of climate change,” Fox-Kemper told CNBC.
“These climate variations occur when sea surface temperature patterns of warming and cooling self-reinforce by changing patterns of winds and precipitation that deepen the sea surface temperature changes.”
But global warming is also contributing. “It would be nearly impossible to reach these ocean temperatures without the added boost of greenhouse gasses from fossil fuel burning and other human activities,” Fox-Kemper told CNBC.
Human-caused greenhouse gas emissions are adding the equivalent of a permanent El Niño worth of heat to the climate every five to ten years, Zeke Hausfather, energy systems analyst and data scientist with a strong interest in climate science and policy and a research scientist at Berkeley Earth, told CNBC.
The recent bout of record-breaking sea surface temperatures are part of a long-term trend. “The last 10 years have been the warmest since at least the 1880s for sea surface temperature,” Castillo told CNBC.
Currently, 44 percent of the global ocean is experiencing what’s called a “marine heatwave,” according to Sarah Kapnick, chief scientist at the National Oceanic Atmospheric Administration. That’s the highest percentage of the global ocean experiencing a marine heatwave since 1991, Kapnick told CNBC via a spokesperson. A marine heatwave is defined as when the ocean temperatures are higher than 90% of the previous observations for that region at that time of year, according to NOAA.
So why does it matter that the oceans are getting hotter?
Warmer oceans make stronger storms
“The most powerful storms on earth — hurricanes and tropical and extratropical cyclones — extract much of their energy from warm, moist air near the ocean surface. Hotter seawater means warmer and moister air, which then has more energy to release leading to stronger storms,” Fox-Kemper told CNBC.
This explains why the most prevalent paths for strong storms follow warm ocean currents like the Gulf Stream and Kuroshio in the Northern Hemisphere, Fox-Kempler said.
In September, the streets of downtown Fort Myers were flooded from Hurricane Ian. This sort of damage can disrupt medical and food supply chains that can raise health risks for diabetics as well as others with chronic diseases. Itâs one of the surprising impacts from climate change that Florida and other coastal states face.
Miami Herald | Tribune News Service | Getty Images
Evaporation of water vapor from the ocean surface, which makes the moist air that drives the stronger storms, is a factor of ocean temperatures and wind speed, and the impact of ocean temperature on that equation is “highly non-linear,” Kirtman told CNBC, meaning that small changes in temperature lead to large increases in evaporation. When water vapor condenses, it releases heat into the atmosphere, which starts a positive feedback loop. “So, if the atmosphere is more moist, there is more condensational heating which intensifies the storm,” he said.
The impact of the warming sea waters on hurricane development varies depending on what region of the ocean sees the highest increase in temperature, Michael Lowry, a hurricane specialist and storm surge expert, told CNBC. The ocean temperatures in the main development region for hurricanes, like the deep tropical Atlantic south of the 20 degrees latitude, are especially critical.
“This is what seasonal hurricane outlooks like those issued by NOAA last week are keying in on,” Lowry told CNBC, referring to a hurricane forecast outlook where NOAA said the warming oceans would boost hurricane activity for the remainder of the season.
But wherever a hurricane forms, the hot oceans will strengthen it. “The extreme sea surface temperature is like dry powder when storms get going. As we say in this business, it only takes one,” Lowry said.
Fish populations will migrate or die
Fish populations depend on specific temperatures.
“All species have a preferred and a lethal temperature range. Once the upper border of the preferred temperature range is reached, they go deeper or pole-ward to cooler waters, if they can,” Rainer Froese, senior scientist at the Helmholtz Centre for Ocean Research in Germany told CNBC. “Already at the upper tolerance range, growth and reproduction are hampered. At the upper lethal range, they die.”
Fish will migrate towards colder waters, if they can. Fish that lived in Florida will be found in New York waters, and fish that lived in New York waters will migrate to Nova Scotia, according to Daniel Pauly, professor at the University of British Columbia‘s Institute for the Oceans and Fisheries. “Individuals are found, especially in the summertime, to reach areas that they never reach before,” Pauly told CNBC.
Fisherman Vigfus Asbjornsson (L) sorts his catch of cod and pollack on August 16, 2021 in Hofn, Hornafjordur, Iceland. Global warming is contributing to a rise in temperatures in the waters around Iceland, which is effecting the fishing industry. Changing temperatures have a strong influence on where species of fish find habitat, leading to shifts in the fishing catch. One local fisherman also said the spawning grounds of the fish he catches are moving farther north year by year. Iceland is undergoing a strong impact from climates change, including accelerated melting of the island’s many glaciers but also new opportunities for agriculture.
Sean Gallup | Getty Images News | Getty Images
Warmer sea water is dangerous for fish for two reasons: “Warmer water contains less oxygen than cold water, but the metabolic oxygen demand of fish is higher in warm water,” Lorenz Hauser, professor at the School of Aquatic and Fishery Sciences in Seattle, told CNBC.
“Fish metabolism depends very much on water temperature, and with warmer water, fish need more food to maintain their bodies and grow,” Hauser told CNBC. “On the other hand, ecosystems change with warmer water, and there may not be sufficient prey around. This was the case with the recent stock collapse of Pacific cod in Alaska.”
While fish may have a chance to migrate if sea water changes are gradual, in a sudden ocean temperature increase like a heatwave, the fish will die, Pauly told CNBC. This is particularly true for larger fish because the surface of the gills on a fish do not grow as fast as the total weight. The bigger fish have less gill area per unit of weight in the same species, Pauly said.
“In the future, we will see massive changes in regional species composition, and lots of die-offs where species cannot escape fast enough, or where they fall prey to predators or are out-competed by species that they have not encountered before,” Froese told CNBC.
Coral reefs are dying
Javier Solar, a member of the Coral Restoration Foundation, brings up threatened coral transplants from the Florida Keys waters for safe keeping on land until the waters cool off. The threat of coral bleaching is extreme as the water temperatures hit over 90 degrees. Members of Coral Restoration Foundation work to save coral species that are threatened by extremely warm waters due to global warming in the Florida Keys. Coral that had been out planted is being removed from the ocean for safe keeping until the water cools down.
Carolyn Cole | Los Angeles Times | Getty Images
Coral reefs thrive in ocean temperatures between 73 and 84 degrees Fahrenheit, but they can survive in both higher and lower temperatures for short periods of time, Castillo told CNBC. But the hot ocean temperatures in Florida have caused “wide-spread coral bleaching,” Castillo said. Coral bleaching happens when the over stressed corals expel zooxanthellae, an algae that they need to survive.
“Although coral can survive bleaching and re-grow their zooxanthellae, these bleaching events debilitate the coral. In the case of the recent heat wave, outright coral die off were reported,” Castillo told CNBC.
Coral reefs are critical to the marine ecosystems. About a quarter of marine species depend on the coral reefs in some capacity, Castillo said.
More dangerous algae blooms
“Microorganisms like it hot,” Hans W. Paerl, professor of marine and environmental sciences at the University of North Carolina at Chapel Hill’s Institute of Marine Sciences, told CNBC. “The higher the temperature and the faster they grow, and so this really has been a boon to them.”
The organisms that can grow really quickly in hot ocean temperatures and cause harmful algae blooms include dinoflagellates and diatoms, which are also called sometimes called microalgae or red tide, and cyanobacteria, which is sometimes called blue-green algae.
In an aerial view, brownish water is visible in the waters at the Berkeley Marina as an algal bloom grows in the San Francisco Bay on August 01, 2023 in Berkeley, California. The San Francisco Regional Water Quality Control Board has warned that a toxic algae bloom in the San Francisco Bay, similar to one that occurred one year ago and killed tens of thousands of fish, has returned to the Bay.
Justin Sullivan | Getty Images News | Getty Images
Both people and animals can get sick by being exposed to these algal blooms or eating seafood contaminated with them. The severity of the sickness depends on type of algae and how long exposure lasted, according to the Centers for Disease Control and Prevention.
Algal blooms can become more intense when nitrogen and phosphorus in fertilizer runoff gets to oceans, and climate change is impacting the pace and cadence of fertilizer runoff because of the increasing severity of both rain storms and dry spells.
“When you have a major storm, it’s going to pick up more nutrients from the land and flush them into our coastal and ocean systems,” Paerl told CNBC. “If a wet period is followed by an extensive drought, then you actually enhance the growth for some of these organisms, because they like stagnant, dry conditions, as well.”
The combination of hotter waters and more fertilizer runoff will drive the algae and bacteria growth and respiration, which creates low oxygen zones that impacts fish populations and can in some instances cause “dead zones,” Paerl told CNBC. “That, of course, has huge implications for the food web, and ultimately for us, in terms of consumers of fish and shellfish.”
As the oceans warm, the blooms themselves are migrating to cooler waters where they’d never been seen before, says Christopher Gobler, professor at Stony Brooke University’s School of Marine and Atmospheric Sciences who researches Coastal ecosystem ecology, climate change, harmful algal blooms.
“Harmful algal blooms that may have never had a chance to form in the past have become dense and widespread in regions such as Alaska and northern Europe,” Gobler told CNBC. “This is highly problematic as these new occurrences can take ecosystems and communities by surprise, exposing marine life and, in some cases humans, to toxins that were regionally unknown, causing mass mortalities and/or illnesses.”
Long-term: Sea level rise
“Water expands as it gets warmer,” Gary Griggs, professor of earth and planetary sciences at the University of California in Santa Cruz, told CNBC.
Kimberly McKenna, Associate Director at Stockton University Coastal Research Center points at a graph indicating rising sea levels in Atlantic City, New Jersey on October 26, 2022. Ten years after the devastating hurricane Sandy, the seaside town of Atlantic City, on the American east coast, has fortified its famous promenade between its casinos and the Atlantic Ocean. But behind the beaches, for the inhabitants of certain neighborhoods, the flooded streets are almost part of everyday life.
Angela Weiss | Afp | Getty Images
So broadly speaking, warmer oceans will lead to sea level rise and coastal flooding risk. “As the ocean warms it expands, much like a gas, and takes up more space, hence sea level rise. Warmer oceans in the higher latitudes means less sea ice which allows the oceans to warm further,” Kirtman told CNBC. “This is known as a positive feedback.”
Generally, about two-thirds of global sea level rise is caused by ice melt from Antarctica, Greenland and continental glaciers and the other one-third from “overall temperature increase,” Griggs said. But also, the recent trend in record-high sea surface temperatures aren’t enough on their own to cause any noticeable changes in sea level, Griggs noted.
“Any large-scale increase in ocean water temperature increases sea level and the amount can be determined if you know the total volume of water affected and the amount of temperature increase by using the coefficient of thermal expansion,” Griggs told CNBC. But there are approximately 330 million cubic miles of sea water, and it takes “a lot of heat to substantially increase sea level rise.”
Economic impacts and looking ahead
Right now, it’s really too soon to measure the economic impact of these record sea surface temperatures, Judith Kildow, founder and director emeritus of the National Ocean Economics Program, told CNBC. Years of more data are needed. In some cases, people who depend on the oceans for their livelihood are adapting, Kildow said. “Fishermen are turning their boats into whale watching enterprises when they no longer can fish profitably,” Kildow told CNBC.
But there will be cascading economic impacts. “Bleached coral reefs, rising sea levels from warming, and migration of fisheries north to their normal temperatures will have an effect on the fishing industry and coastal tourism as well as the value of coastal real estate,” Kildow told CNBC. AStronger storms, driven by warming ocean waters, will cause more devastating and expensive damage if they make landfall. “Value of costal real estate will drop precipitously in a short period of time,” Kildow said.
If it sounds like a lot of bleak news, it is. Asked if there were any benefits to the warming oceans, Schmidt from NASA responded: “Slightly extended beach swimming period?”
The best way to ameliorate the whole cornucopia of negative impacts is to reduce greenhouse gas emissions.
“Of course, the key to all of this is less fossil fuel combustion,” Paerl told CNBC. It’s also important to reduce the release of other greenhouse gas like methane and nitrogen oxides, he said. “So that’s one thing we should all be doing is consuming and burning less fossil fuels.”
Technology
After 20 years at the helm, Klarna’s CEO Sebastian Siemiatkowski is about to face his biggest test yet
Sebastian Siemiatkowski, CEO of Klarna, speaking at a fintech event in London on Monday, April 4, 2022.
Chris Ratcliffe | Bloomberg via Getty Images
LONDON — After 20 years in the role as Klarna’s CEO, Sebastian Siemiatkowski is about to face his toughest test yet as the financial technology firm prepares for its blockbuster debut in New York.
Siemiatkowski, 43, co-founded Klarna in 2005 with fellow Swedish entrepreneurs Niklas Adalberth and Victor Jacobsson with the aim of taking on traditional banks and credit card firms with a more user-friendly online payments experience.
Today, Klarna is synonymous with “buy now, pay later” — a method of payment that allows people to buy things and either defer payment until the end of the month or pay off their purchases over a series of equal, interest-free monthly installments.
But while Siemiatkowski has grown Klarna into a fintech powerhouse, his entrepreneurial journey hasn’t been without its challenges — from facing rising competition from rivals such as PayPal, Affirm and Block‘s Afterpay, to an 85% valuation plunge.
Nevertheless, Siemiatkowski hasn’t taken those challenges lying down and the outspoken co-founder isn’t shy to challenge criticisms in the run up to an IPO that could value it at $15 billion.
‘Crazy enough’
In October 2024, CNBC met with Siamiatkowski during a visit the Swedish entrepreneur made to London. For a businessman who’s faced a rollercoaster ride of ups and downs over his two-year CEO tenure, Klarna’s chief has a calm air to him.
“Independently of all the cycles and everything we’ve gone through with the company, at any point in time I ask myself, do I still think that Klarna can become the next Google in size, that we can become a hundreds of billions dollar market company, or a trillion dollars,” Siemiatkowski told CNBC. “I still am crazy enough to think that’s achievable.”
Once a pandemic-era darling valued at $46 billion in a SoftBank-led funding round, Klarna saw its valuation plummet 85% in 2022 to $6.7 billion as rising inflation and interest rates dented investor sentiment on high-growth technology firms.
But the firm has attempted to rebuild that eroded value in the years that have followed.
Klarna makes money predominantly from fees it charges merchants for providing its payment services, in addition to income from interest-bearing financing plans and advertising revenue.
Financials disclosed in its IPO filing show that Klarna reported revenue of $2.8 billion last year, up 24% year-over-year, and a net profit of $21 million — up from a net loss of $244 million in 2023.
Bullish on AI
After the launch of OpenAI’s generative AI ChatGPT in November 2022, Siemiatkowski quickly pivoted Klarna’s focus to embracing the technology, and especially in a way that could slash costs and enhance the firm’s profitability.
However, Siemiatkowski’s strategy and his comments on AI have also attracted controversy.
Klarna imposed a freeze on hiring in 2023 as it looked to tighten costs. The following year, the company said that its AI chatbot was doing the work of 700 full-time customer service jobs.
Klarna’s CEO then said in August that his company was able to reduce its overall workforce to 3,800 from 5,000 thanks in part to its application of AI in areas such as marketing and customer service.
“By simply not hiring … the company is kind of becoming smaller and smaller,” he told Reuters news agency, adding that jobs were disappearing due to attrition rather than layoffs.
Asked by CNBC about his views on AI and the upset they have caused, Siemiatkowski suggested he was “done apologizing,” echoing comments from Mark Zuckerberg about the Meta CEO’s “20-year mistake” of taking responsibility for issues for which he believed his company wasn’t to blame.
Doubling down, Siemiatkowski added that AI “already today can do a lot of the jobs that people do — but I don’t want to be one of the tech leaders that stands on a stage and says, ‘Don’t worry about it, there’s going to be new jobs,’ because I don’t know what those new jobs are.”
“I just want to be transparent and honest with what I think is happening, and I’d rather be open about that, because I know what these people, the tech leaders are saying when they’re not on public stages, and they’re not saying the exact same things,” he told CNBC in October.
An outspoken CEO
Siemiatkowski is no stranger to defending his company in response to criticisms, especially when challenged over Klarna’s business model of offering short-term financing for all kinds of things from clothing to online takeout.
Last week, Klarna announced a tie-up with DoorDash to offer its flexible payment options on the U.S. food delivery app. However, the move was met with backlash from internet users, who said it risks saddling struggling consumers with more debt.
One X user posted a meme showing personal finance pundit Dave Ramsey with the caption, “what do you mean you have $11k in ‘doordash debt’.”
Siemiatkowski took to X to defend the move, saying that Klarna “offers many payment methods” including the ability to pay in full instantly or defer payment until the end of the month in addition to monthly installments.
“DoorDash offers many products beyond food!” Klarna’s boss said on X in response to the criticisms. “I know we are most famous for pay in 4. But you can use a credit card at DoorDash as well.”
In 2022, the outspoken entrepreneur stressed his company was “superior” to credit cards and “extremely recession-proof” after the firm laid off 10% of its workforce.
As Klarna approaches its stock market debut, investors will likely be scrutinizing his track record and whether he’s still the right person to lead the company longer term.
Lena Hackelöer, CEO of Stockholm-based fintech startup Brite Payments, is someone who’s worked under Siemiatkowski’s leadership, having worked for the company for seven years between 2010 and 2017 in various marketing functions.
She expressed admiration for the Klarna co-founder — and pushed back on suggestions that leadership mismanaged the business during the pandemic era.
“I never thought that they had mismanaged, which is somehow how it was reported,” Hackelöer told CNBC in a November interview. “I think that they were just very much focusing on growth — because that was the direction that investors were giving.”
Rollercoaster ride
Siemiatkowski admits the journey of building Klarna hasn’t always been rosy.
Asked about the biggest challenge he’s ever faced as CEO, Siemiatkowski said that, for him, laying off 10% of Klarna’s workforce in 2022 was the toughest thing he’s ever had to do.
“That was very difficult because I didn’t predict that investor sentiment would shift that fast and people would go from valuing companies like ours so high and then to something so low,” he said.
“That’s obviously very difficult because, then you realize like, ‘OK, s—, I’m going to have to make a change. It’s not going to be sustainable to continue, and I need to protect the consumers, who are stakeholders in the company, the employees, the investors — I need to [do] what’s right for all of my constituents,” Siemiatkowski continued.
Klarna is synonymous with the “buy now, pay later” trend of making a purchase and deferring payment until the end of the month or paying over interest-free monthly installments.
Nikolas Kokovlis | Nurphoto | Getty Images
“But unfortunately, it’s going to affect the smaller group, which happened to be about 10% of our employees.”
Like other tech firms, Klarna grew significantly over the Covid-19 pandemic. In 2020, the firm grew its gross merchandise volume or the total value of all sales processed through its platform, by 46% year-over-year, to $53 billion.
I think anyone who is a little bit sane, that’s not something you take light hearted, right? It’s a tough decision. It makes you cry. I’ve cried.
Sebastian Siemiatkowski
CEO, Klarna
The company also onboarded hundreds of new employees to capitalize and expand on the opportunity it saw from government lockdowns’ impact on consumer behavior and the broader acceleration of e-commerce adoption at that time.
“I think anyone who is a little bit sane, that’s not something you take lighthearted, right?” Klarna’s CEO said, referring to the layoffs. “It’s a tough decision. It makes you cry. I’ve cried.”
However, Siemiatkowski stood by his decision to lay off workers: “I felt like I had an obligation to my constituents, everyone, all of these stakeholders, the company, and I think it was a necessary decision at that point in time.”
The road to IPO
Now, Klarna’s CEO faces his biggest test yet — taking the business he co-founded two decades ago public.
“IPOs are risky for companies as share prices can fluctuate quickly,” Nalin Patel, director of EMEA private capital research at PitchBook, told CNBC via email. “They can be costly and lengthy to arrange with investment banks too.”
Klarna earlier this month filed its prospectus to list on the New York Stock Exchange. The company hasn’t yet set a date for when it will go public, nor has it priced shares.
If it succeeds, the outcome could catapult the net worth of Siemiatkowski and other shareholders including Sequoia Capital, Silver Lake, Mubadala Investment Company, and the Canada Pension Plan Investment Board.
Sequoia is Klarna’s single-largest shareholder with a 22% stake. Siemiatkowski is the second-largest, owning 7% of the business.
A positive IPO outcome would also lift the value of Klarna employees’ stakes, and potentially boost morale after a turbulent few years for the company.
“It’s a balance between finding a fair value for existing investors looking to cash out and new investors seeking a stake in Klarna at a fair price. Overvaluing the company could lead to its valuation falling in the future. While undervaluing it may mean money has been left on the table for those exiting,” Patel said.
Sundar Pichai, CEO of Google and Alphabet, attends the inauguration of a new hub in France dedicated to the artificial intelligence sector, at the Google France headquarters in Paris, France, on Feb. 15, 2024.
Gonzalo Fuentes | Reuters
After Google scrapped its diversity, equity and inclusion, or DEI, hiring aspirations in February, CEO Sundar Pichai addressed the matter with his employees at a company all-hands meeting.
“We believe in building a representative workforce,” Pichai said, according to audio obtained by CNBC. “We’re a global company, we have users around the world, and we think the best way to serve them well is by having a workforce that represents that diversity, and we’ll continue to do that.”
“At the same time, as a company we will always have to comply with local laws,” Pichai added.
Among the most notable changes by Google thus far was with Melonie Parker, the company’s chief diversity officer. As of February, her title has been changed to vice president of Googler engagement.
Google’s approach to DEI is emblematic of changes that companies across the U.S. are making to their DEI programs in the wake of President Donald Trump’s election and initial actions in his return to the White House.
Over the past decade, Silicon Valley and other industries used DEI programs to root out bias in hiring, promote fairness in the workplace and advance the careers of women and people of color – demographics that have historically been overlooked.
While DEI started as an umbrella acronym to even the playing field, it’s become a loaded term.
In 2023, the Supreme Court ruled against Harvard University’s affirmative action admission policies – a decision that had implications for how corporations hire. In one of his first acts of his second term, President Donald Trump signed an executive order in January to end the government’s DEI programs and put federal officials overseeing those initiatives on leave.
The order directs “all departments and agencies to take strong action to end private sector DEI discrimination, including civil compliance investigations.” The administration has targeted nearly 50 companies that it’s deemed to be in violation of its anti-DEI rules, Bloomberg reported in February.
Among the first of those targets is the Walt Disney Company. The Federal Communications Commission informed the company on Friday that it will begin an investigation into the DEI efforts at the media giant.
Trump has shown he’s willing to fault DEI policies for human tragedy.
Following a midair collision between an American Airlines regional jet and a Black Hawk military helicopter above Washington in January, Trump blasted the Biden administration’s DEI policies for the crash without citing any evidence. Trump claimed DEI “could have been” to blame for the deadliest plane crash in the U.S. since 2001.
“When you have the president blaming DEI for a plane crash, I think it makes sense that companies don’t want to be out there no matter how they define it internally,” Emerson said.
Despite DEI becoming such a divisive term, companies are not necessarily ending their efforts. They’re rebranding them. Many companies are continuing DEI work but using different language or rolling it under less charged terminology, like “learning” or “hiring.”
Paradigm’s CEO Joelle Emerson is an advocate for diversity and inclusion.
Source: Paradigm
DEI by any other name
Joelle Emerson has worked since 2014 as a consultant for several hundred clients on workplace performance as well as diversity and inclusion strategies, but last year, she changed the language used to describe her digital platform Paradigm.
Whereas before Paradigm marketed itself as helping clients “harness the power of diversity and inclusion to create a culture where everyone can do their best work and thrive,” the company’s website now states that its solutions “create an inclusive, high-performance culture where everyone can do their best work and thrive.”
Paradigm began using DEI in 2020 after the term proliferated in the corporate response to protests across the country in the wake of George Floyd’s death.
“We started using that a lot on our websites so that companies searching for ‘DEI’ could find us,” Emerson told CNBC. “Pre-election, as we were seeing a lot of the backlash, we reduced our use of the acronym because I didn’t think it would be the best description of what we do.”
Devika Brij, who does similar work through her Brij The Gap consulting firm, detailed her efforts to distinguish her work in a newsletter sent out in February titled “Tailored Career and Leadership Development Isn’t DEI.” For companies like Brij’s, the re-branding is critical to the future of their business – some of Brij’s clients have slashed their DEI budgets by as much as 90% since 2023, she said at the time.
It’s not just consulting firms that are rebranding DEI.
JPMorgan in March announced that it will replace “equity” with “opportunity” in a rebrand of its DEI program. Walmart in November said it was shifting from DEI to saying “Walmart for everyone.” Among Fortune 100 companies, there was a 22% decrease in the use of terms like “DEI” and “diversity” and a 59% increase in terms like “belonging” between 2023 and 2024, according to Paradigm.
Emerson said 2023 marked the turning point for DEI in Silicon Valley.
That’s when Google began getting rid of staffers who were in charge of recruiting people from underrepresented groups, CNBC reported. The company also let go of DEI leaders under Parker.
Amazon also reorganized its DEI group in 2023 and brought global teams under one umbrella named “Inclusive Experiences & Technology.” The company renamed the group to better represent the nature of the work, a company spokesperson told CNBC, adding that Amazon remains committed to building a diverse and inclusive company.
As part of that overhaul, Amazon’s Candi Castleberry changed her vice president title from “VP of Global Diversity Equity and Inclusion” to “VP of Inclusive Experiences & Technology.”
Tech’s DEI rollback has accelerated in 2025.
Google, which has cloud-computing contracts with federal agencies, announced in February that it would retire its aspirational hiring targets following Trump’s executive orders. Google’s commitments for 2025 had included increasing the number of people from underrepresented groups in leadership by 30% and more than doubling the number of Black workers at non-senior levels.
“Our values are enduring, but we have to comply with legal directions depending on how they evolve,” Pichai told staffers at the February all-hands meeting.
He and Parker were answering a question from staffers about how the company’s DEI programs would be impacted given Trump’s recent executive orders.
“As a federal contractor, we have been reviewing all our programs, all our initiatives,” Parker said. “With regards to training, we’re going to deprecate, or stop or sunset, a number of our training programs that are focused on DEI.”
A spokesperson for Google did not clarify which of the company’s DEI programs have been cut.
Pichai went on to assure workers that Google would continue to support its employee resource groups. Those are employee-led networks within the company that focus on specific demographic or affinity groups, such as “Women@Google” and “Black Googler Network.”
Those comments, however, came before the Equality Employment Opportunity Commission published guidance in March that listed ERGs as a potential violation of Trump’s executive order if they are exclusionary. Google’s ERGs are open to all employees and do not exclude any protected groups, the company spokesperson told CNBC.
“Based on the current legal climate, we’re reviewing our DEI programs and making changes where needed,” the Google spokesperson said in a statement.
Melonie Parker speaks on stage during The 37th Annual Hispanic Heritage Awards at The Kennedy Center on Sept. 5, 2024 in Washington, DC.
Paul Morigi | Getty Images
The sensitivity of the term DEI came to the forefront earlier this month at Austin’s annual South by Southwest conference. There, Google and Oracle had been slated to participate in a panel, originally titled “Successful Workplaces: Balancing Growth and Well-Being.”
“Attendees will leave with actionable insights to align business success with a thriving workplace culture,” an early description of the panel noted.
Oracle dropped out from the panel in February. That month, panel organizers informed participating companies that they were considering changing the focus of the conversation to the state of DEI in the workplace.
“The fact that the Trump administration took such an aggressive approach to DEI just made obvious, in our view, how timely this discussion was,” said panel organizer Luis Gramajo, founder of nonprofit Sunday Afternoon Foundation, which helped organize that particular SXSW panel.
The Google panelist dropped out in March after the panel’s name was officially changed to “Post-DEI Workplace: Tech Companies Managing Through Turmoil.”
“We went through I don’t know how many prep calls, we changed the title of this eight plus times, we lost people who were afraid to be on this panel,” said Chelsea Toler, one of the SXSW panelists and a co-founder at Logictry, an Austin startup.
Google was not informed of the change until late February, the company spokesperson told CNBC, adding that the panel’s new topic was outside of the employee’s role and experience.
“We had a couple different panelists back out because this conversation, which is so important, has become kind of nuclear at this point, which is wild,” said Diana Ransom, Inc. Magazine executive editor and the panel’s moderator, at the event.
Gramajo said he doesn’t begrudge any of the panelists or companies that pulled out of the panel.
“They are, as we all are, navigating an incredibly complex and uncertain time, where the rules are not clear,” he said.
Amazon CEO Andy Jassy looks on during an Amazon Devices launch event in New York City, U.S., February 26, 2025.
Brendan McDermid | Reuters
Amazon has also pulled back on DEI.
The company told staffers in December that it was halting some of its DEI programs as part of a broader review of those initiatives. It also eliminated references to inclusion and diversity in its annual report while altering a website to remove sections titled “Equity for Black people” and “LGBTQ+ rights.”
Amazon CEO Andy Jassy characterized the DEI eliminations as being part of Amazon’s ongoing cost-cutting efforts.
“If you look at us, kind of like a lot of other companies, particularly after George Floyd, and particularly because we’re so decentralized, we had a lot of programs in this area,” Jassy told staffers earlier this month, according to audio obtained by CNBC. “We had about 300 programs.”
Amazon began evaluating its DEI programs “a couple years ago,” Jassy said.
“We realized there were several of them where we weren’t getting enough value out of them for us to be investing in that way and those programs, we streamlined those,” Jassy said. “And in the programs where we were having a real impact, we doubled down.”
It’s unclear which programs Amazon cut and which it has expanded.
Continuing the work
“The acronym of DEI is completely unhelpful,” said Aubrey Blanche-Serrallano, vice president of equitable operations at Culture Amp, a human resources platform. “Diversity is incredibly valuable and important, but that specific acronym obscures a lot of what we’re talking about.”
For all the backlash toward DEI in Washington, recent studies show that this type of work remains popular among workers and companies.
Pew Research in 2023 found that 86% of workers say they have a neutral-to-favorable opinion about increasing diversity, equity, and inclusion in the workplace. Paradigm, meanwhile, published a study last year which found that 73% of companies included diversity, equity and inclusion in their company values, on par with 2023.
“The feeling of the moment doesn’t match a lot of the data I’m looking at,” Blanche-Sarellano said.
The experts that spoke with CNBC said they’ve yet to lose any clients as a result of the DEI backlash. To the contrary, they said they are optimistic that organizations will be forced to be more thoughtful about their plans and do away with “performative” aspects of DEI that did little to move the needle.
Experts said one key example of performative actions were when companies signaled support for social media movements, like 2020’s Blackout Tuesday, without any meaningful action to follow. Another example were companies that added chief diversity officers to their ranks without giving them formalized decision-making power or budgets.
Among the changes happening now are companies shifting away from diversity reports, which tracked hiring based on different genders and ethnicities, and focusing instead on tracking the rates at which promotions and attrition happen, Emerson said.
Companies are also changing how they have candidates apply for programs, Emerson said. With internships designed for specific ethnicities, for example, candidates might no longer simply check whether they are black or Hispanic but instead write an essay about their background, she said.
Some experts are helping their clients calculate how much risk they may face by continuing DEI work under different names.
“There’s a lot of legal gray area right now,” Blanche-Sarellano said. “At the end of the day, they want to focus on investing in their employees, not spend all their resources on a lawsuit.”
Y-Vonne Hutchinson, chief executive officer of ReadySet, speaks during the Bloomberg Breakaway CEO Summit in New York, U.S., on Tuesday, June 18, 2019.
Mark Kauzlarich | Bloomberg | Getty Images
Companies have to weigh the risk of regulatory compliance and the potential for public backlash against the cost of doubling down on DEI, said Y-Vonne Hutchinson, founder of ReadySet, a firm that helps clients “build adaptable organizations.”
“A lot of these companies have more diverse consumers,” she said. “They still have to think about what is going to make them money and viable businesses have to think about a global audience.”
ReadySet, for example, has what it calls a “DEI Risk Assessment Tool” which measures DEI risks across five dimensions: Legal and compliance, reputational, financial, cultural and workforce and operational risks.
By changing the terminology that is used, companies can prevent their work from being susceptible to misunderstanding, said Emerson, adding that her firm Paradigm is advising companies to be more specific about what they want to achieve.
“We should be more precise in the language we use,” she said.
But while some experts are encouraging companies to change their terminologies, others are advising those in the field to continue touting DEI.
That was the case at the Post-DEI panel at SXSW. The panelists challenged the notion that they should stop using it.
“DEI means everybody has a fair and equitable opportunity to succeed,” said Fran Harris, an entrepreneur based in Austin. “We have to remind people what DEI is – it is the work. It’s not just an acronym. It’s the work of creating equal opportunities, period.”
Panelists encouraged attendees to not succumb to fear.
“In this country, when we stop using our voice because we’re scared, we’ve lost,” Logictry’s Toler said.
Technology
23andMe bankruptcy: With America’s DNA put on sale, market panic gets a new form of testing
Signage at 23andMe headquarters in Sunnyvale, California, U.S., on Wednesday, Jan. 27, 2021.
David Paul Morris | Bloomberg | Getty Images
DNA testing has become a valuable tool for hobbyists and novice genealogists. For some, learning they are the 10th cousin of Paul Revere or the 15th great nephew four times removed of the last King of Prussia is worth the perceived risk of sharing a DNA sample. But what happens when the company harvesting the DNA goes bankrupt?
That was the question posed to millions of Americans last week when 23andMe, the company that popularized consumer genetic testing and had early backing from Google, filed for bankruptcy, leading to a wave of calls for Americans to delete their DNA from the company’s database.
While it’s not 100 percent clear if the “delete your DNA” calls were warranted, privacy experts are alarmed, and Americans who had taken the genetic test took the advice to heart.
According to data from online traffic analysis company Similarweb, on March 24, the day of the bankruptcy announcement, 23andMe received 1.5 million visits to its website, a 526% increase from one day prior. According to Similarweb, 376,000 visits were made to help pages specifically related to deleting data, and 30,000 were made to the customer care page for account closure. The next day, that figure rose to 1.7 million visits, and rraffic to the delete data help page about 480,000.
Margaret Hu, professor of law and director of the Digital Democracy Lab at William & Mary Law School, thinks Americans made the right move. “This development is a disaster for data privacy,” said Hu. In her view, the 23andMe bankruptcy should serve as a warning as to why the federal government needs strong data protection laws.
In some states, Hu noted, the government is taking an active role in counseling consumers. The California Attorney General’s Office is urging Californians to delete their data and have 23andMe destroy saliva samples. But Hu says that is not enough, and such guidance should be provided to all U.S. citizens.
The potential national security implications of 23andMe’s data falling into the wrong hands are not new. In fact, the Pentagon had previously warned military personnel that these DNA kits could pose a risk to national security.
Exposing DNA collected from consumers is not a new issue for 23andMe, either. In 2023, almost 7 million people who took the genetic test were already exposed in a major 23andMe data breach. The company signed an agreement that involved a $30 million settlement and a promise of three years’ worth of security monitoring.
But Hu says the bankruptcy does make the company, and its data, especially vulnerable now.
Drug research and genetic testing data
One of the things notable about the consumer mindset in the early years of the popularization of genetic testing was that a majority of users opted into sharing their DNA for research purposes, as much as 80% in the years when 23andMe was growing rapidly. Then, as the market for consumer sale of the popular DNA test kits reached saturation sooner than many expected, 23andMe focused more on research and development partnerships with drug companies as a way to diversify its revenue.
Currently, when 23andMe sells genetic data to other research companies, most is used at an aggregate level, as part of millions of data points being analyzed as a whole. The company also strips out identifying data from the genetic data, and no registration information (like a name or email) is included. Data researchers do need, such as date of birth, is stored separately from genetic data, and shared with randomly assigned IDs.
Hu is among the experts concerned these practices could change under 23andMe or any new buyer. “In a time of financial vulnerability, companies such as pharmaceutical companies might see an opportunity to exploit the research benefits of the genetic data,” Hu said, adding that they might try to renegotiate prior contracts to extract more data from the company. “Will the next company that buys 23andMe do that?,” Hu said of its privacy policies.
In recent days, 23andMe has said it will try to find a buyer who shares its privacy values.
23andMe did not respond to a request for comment.
Anne Wojcicki, 23andMe Co-Founder & CEO pushes the button, remotely ringing the NASDAQ opening bell at the headquarters of DNA tech company 23andMe in Sunnyvale, California, U.S., June 17, 2021.
Peter DaSilva | Reuters
Over the years since 23andMe’s founding in 2006, many customers were willing to send in a swab to learn more about their family history. Lansing, Michigan resident Elaine Brockhaus, 70, and her family were excited to learn more about their lineage when they submitted samples of their DNA to 23andMe. But with the company now teetering in bankruptcy and privacy experts concerned about what happens to the millions of people with DNA samples stored, Brockhaus says the whole thing has “caused a bit of a ruckus in my family.”
“We enjoyed some aspects of 23&Me,” Brockhaus said. “They continually refined and updated our heritage as more people joined, and they were better able to pinpoint genetically related groups,” Brockhaus said. She was able to learn more about health risk factors that were present or not present in her past.
Now, her family has come full circle in the 23andMe experience: some members were initially reluctant to go along, and now, Brockhaus says, everyone has deleted their accounts.
A unique company collapse, but everyday cyber risks
But Brockhaus continues to view 23andMe within a larger consumer health market where the risks are not new, and health information is being shared in all sorts of environments where security issues could arise. “Anyone sending ColoGuard or receiving medical results through the mail is taking a risk of exposure,” Brockhaus said. “Our very identities can be stolen with a few keystrokes. Of course, this does not mean that we should throw up our hands and agree to be victims, but unless we want to dig holes out back and live in them we have to be vigilant, proactive, but not panicked,” she added.
Jon Clay, vice president of threat intelligence at cybersecurity firm Trend Micro, says consumers of 23andMe do need to view the bankruptcy as a threat. In any sale process, if the data is not transferred and guarded in the most secure manner possible, “it is at risk of being used by malicious actors for a number of nefarious purposes,” he said.
Clay thinks 23andMe’s data is incredibly valuable to cybercriminals — not just because it’s permanent and personally identifiable, but also because it can be exploited for identity theft, blackmail, or even medical fraud.
“Cybercriminals can use it to target consumers with convincing scams and social engineering tactics, such as fraudulently claiming someone is a blood relative to another person or to send deceptive messages about their potential health risks,” Clay said. “Organizations who go bankrupt should ensure the security and privacy of their customer’s data is critical, and any sharing or selling of data to others should not be done,” he added.
But other experts say the lesson of 23andMe is less about the company’s collapse and the threat to privacy that created than serving as a reminder about the everyday cyber hazards related to personal information.
“When people start talking about personal data, they forget where their data is already sitting,” says Rob Lee, chief of research and head of faculty at SANS Institute, which specializes in helping businesses with information security and cyber issues. Whether it’s sending a blood sample into a private lab or getting rid of a laptop to upgrade to a new one, “your digital footprints are being left out there for people to find,” Lee said. “People don’t understand the scope, so there is a larger discussion out there, specifically around where does data go?”
With DNA information, there are certain basic legal factors people should weigh before swabbing themselves and sending the sample in.
According to Lynn Sessions, an expert on healthcare privacy and digital assets and partner at the law firm BakerHostetler, the federal law that covers patient information privacy, HIPAA, does not apply to this situation, and 23andMe would not be considered a HIPAA-covered entity, or business associate of one. But there are state laws that apply to genetic information that would be in play, such as in California.
Meredith Schnur, a managing director and cybersecurity leader at insurance company Marsh, thinks the risk from 23andMe’s bankruptcy for people who sent in their swabs is relatively low. “It doesn’t cause any additional consternation or heartburn,” Schnur said. “I just don’t think it opens up any additional risk that doesn’t already exist,” she said, adding that many people’s information is “already out there.”
Last week, a 23andMe co-founder, Linda Avey, blasted the company’s leadership. “Without continued consumer-focused product development, and without governance, 23andMe lost its way, and society missed a key opportunity in furthering the idea of personalized health,” Avey wrote in a social media post. “There are many cautionary tales buried in the 23andMe story,” Avey said.
The bankruptcy itself is the issue that is now hard for consumers to ignore, and until the sale process is completed, the questions will remain.
“When you’re in bankruptcy, data privacy values are not what you’re really thinking about. You’re thinking about selling your company to the highest bidder,” Hu said. That highest bidder, Hu says might take the genetic data and consumer profile data and link them together when selling it to others.
And that initial sale which includes the DNA of millions of people may only be the first of many transactions.
“It might sell it off, piece by piece, indiscriminately. And the buyer of that data might be a foreign adversary,” Hu said. “That is why this is not just a data privacy disaster. It’s also a national security disaster.”
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