AnitaB.org CEO Brenda Wilkerson speaks on a panel with Dr. Jackie Bouvier Copeland at the 2019 Grace Hopper conference.
Shortly after the murder of George Floyd at the hands of Minneapolis police in 2020, Google was among many tech companies that set up new programs aimed at supporting Black employees. The goal, CEO Sundar Pichai wrote, was “to build sustainable equity for Google’s Black+ community, and externally, to make our products and programs helpful in the moments that matter most to Black users.”
Google’s vocal commitments included improving representation of underrepresented groups in leadership by 30% by 2025; more than doubling the number of Black workers at nonsenior levels by 2025; addressing representation issues in hiring, retention and promotions; and establishing better support for the mental and physical health for Black employees.
The move was part of a broader trend in the wake of the Floyd killing, which sparked societal unrest and drew attention to the power imbalances in corporate America and the tech industry specifically. Corporations pledged to invest millions of dollars to improve diversity in their ranks and support external groups doing work on diversity, equity and inclusion, or DEI.
But in 2023, some of those programs are in retreat.
By mid-2023, DEI-related job postingshad declined 44% from the same time a year prior, according to data provided by job site Indeed. In November 2023, the last full month for which data was available, it dropped 23% year over year.
That’s a sharp contrast with the period from 2020 to 2021, when those postings expanded nearly 30%.
In line with this broader trend, both Google and Meta have cut staffers and downsized programs that fell under DEI investment.
The year’s cuts have also impacted smaller, third-party organizations who counted on big tech clients for work, despite the continued growth of those tech giants.
“Whenever there is an economic downturn in tech, some of the first budgets that are cut are in DEI, but I don’t think we’ve seen such stark contrast as this year,” said Melinda Briana Epler, founder and CEO of Empovia, which advises companies and leaders to use a research-based culture of equality.
“When George Floyd began to become the topic of conversations, companies and executives doubled down on their commitments and here we are only a couple years later, and folks are looking for opportunities to cut those teams,” said Devika Brij, CEO of Brij the Gap Consulting, which works with tech companies’ DEI efforts. Brij said some of her clients had cut their DEI budgets by as much as 90% by midyear.
However, more than just broken promises are at stake, experts told CNBC in a series of interviews.
The cuts come at a time when technology companies are forging ahead on the biggest technology shift in a decade: artificial intelligence. If diverse people are not included in AI development, that may result in even greater power imbalances for both corporate workers, as well as consumers who will use their products.
“Our commitment to DEI remains at the center of who we are as a company,” a Meta spokesperson wrote in a statement to CNBC. “We continue to intentionally design equitable and fair practices to drive progress across our people, product, policy and partnerships pillars.”
“Our workforce reductions and company-wide efforts to sharpen our focus span the breadth of our business,” said a Google spokesperson, saying that the company remains committed to underrepresented communities and DEI work. “To be absolutely clear, our commitment to that work has not changed and we invested in many new programs and partnerships this year.”
The Google spokesperson did not dispute any specifics in this story, but pointed to new investments in partnerships this year, including committing more than $5 million to historically Black colleges and universities to help build a stronger pipeline to the tech industry for underrepresented talent, and launching the Google for Startups Women Founders Fund to help women entrepreneurs.
Cuts to internal teams and programs
In 2021,after facing complaints about pay equity in its Engineering Residency program, Google said it would be sunsetting the program and replacing it with a new one called Early Career Immersion, or ECI, which is aimed at helping underrepresented talent develop skills. (Google said sunsetting Engineering Residency was an unrelated business decision.)
But Google decided not to hire a 2023 cohort of ECI software engineers, citing an uncertain hiring outlook, according to correspondence viewed by CNBC. It also laid off some staffers associated with the program.
Participants in a separate Google program called Apprenticeships also lodged complaints about a lack of pathways and pay inequities in the last year, CNBC found.
“Apprentices become part of our mission to build great products for every user, and their different experiences help ensure that our products are as diverse as our users,” Google’s Apprenticeships website states.
But Apprenticeships participants complained they were getting paid less than other engineers during the course of the 20-month program despite doing similar work. They said they were doing “Level 3” work with L3 expectations and contributing significantly to Google’s codebase while earning half of full-time L3 software engineers’ base salary, according to internal correspondence seen by CNBC.
The apprentices even confronted the executive sponsor of the program, Aparna Pappu, vice president of Google Workspace, pointing out the executive’s prior stated goal “to increase representation of underrepresented talent across Google.”
The company said that apprentices are paid a salary for the learning and training they receive as part of the program, and that it reviews compensation annually to ensure alignment with the market.
The Apprenticeships program, which included real-work job training for underrepresented backgrounds, followed other failed efforts to improve diversity. In 2021, for instance, Google said it shut down a long-running program aimed at entry-level engineers from underrepresented backgrounds after participants said it enforced “systemic pay inequities.” That same year, CNBC found the company’s separate program that worked with students from historically Black colleges, suffered extreme disorganization, racism and broken promises to students.
Google and Meta also made cuts to personnel who were in charge of recruiting underrepresented people, according to several sources and documentation.
Nearly every member of Meta’s Sourcer Development Program, more than 60 workers, was let go from the company as part of its layoff of over 11,000 workers, CNBC learned. They claimed to have received inferior severance packages compared with other workers who were laid off in the same time period. Meta’s Sourcer Development Program was intended to help workers from diverse backgrounds obtain careers in corporate technology recruiting.
Google also cut DEI leaders who worked with Chief Diversity Officer Melonie Parker, while Meta made cuts to several DEI managers — some of whom it hired in 2020.
Layoffs at Google and Meta also included employees who held leadership roles in their respective Black employee resource groups, known as ERGs.
“There’s a lowering of physiological safety with layoffs or impending layoffs, and holding ERGs accountable for that is not fair and can lead to even more burnout,” Epler said.
In addition to cutting staff who worked on DEI programs and ERGs, both Meta and Google cut planned learning and development training for underrepresented talent, according to multiple sources who asked not to be named due to fear of retaliation. Meta said that learning and development programs were “merely streamlined to make them more impactful.”
“There’s a consistent amount of folks who have completely failed, mostly because they don’t have the internal teams to keep the mission forward,” said Simone White, who is senior vice president of Revenue Blavity, a media organization that focuses on content for the Black community, and puts on AfroTech, which became a popular tech conference for Black tech talent and companies seeking to hire them.
Cuts impacting external organizations
While internal DEI programs have suffered, the cuts were arguably even harder for external organizations who expected the same amount of corporate sponsorship and support from tech companies in 2023 as they had the prior few years.
In early 2023, big tech leaders, including Google and Meta were among companies that lessened their work with third parties that were counting on projects, according to several organizations and sources who spoke with CNBC.
Brij, CEO of Brijthe Gap Consulting, explained how the steep cuts have affected her firm, which consults with companies on building an effective workforce for underrepresented workers and includes workshops and programs.
“Right now with these budgets being entirely limited or cut, we’re just really backpedaling on so much of the work that we’ve done.”
Brij said some companies have even asked her to provide work for free.
“A lot of companies we worked with started to make progress before the cuts,” Epler said. “Now, it’s like some of them are essentially wiping away that work.”
Stefania Pomponi, founder of Hella Social Impact, said executives have blamed cost-cutting as they’ve canceled contracts with the firm, which consults with companies’ leadership to create more inclusive workplaces through programs and training.
“I’ve been telling them, ‘look, your bottom line is also your people and these types of cuts are going to impact your business'” Pomponi said, pointing to various studies on diverse teams producing higher performance outcomes.
“As I talk to my colleagues across the space, some of the monies that were set aside around the time of George Floyd’s murder have not been fully extended, and that says to me that organizations like ours are needed now more than ever,” said Brenda Wilkerson, CEO of AnitaB.org, which puts on Grace Hopper, the largest women’s tech conference, which took place in September.
Some large tech companies, including Meta, pulled back from sponsorship or attendance for employees to attend Grace Hopper 2023, according to sources who asked to remain anonymous because they are not authorized to speak to the media. Some companies, including Microsoft, ended up sending some leaders to attend virtually so they wouldn’t have to pay for travel, according to two sources who wished to remain anonymous.
Microsoft said it still sent some employees physically, and both Microsoft and Meta told CNBC that Grace Hopper’s virtual option allowed more employees to participate.
Other companies such as Google, which still had a presence at the conference, retracted travel for some employees who had previously been approved to attend, according to several sources who asked to remain anonymous. Google is also among companies to reduce their spending with Blavity, the organization that puts on AfroTech, according to sources who asked not to be named due to being unauthorized to speak.
“We do have a significant amount of our existing corporate partners that are telling us ‘Hey, we can’t participate this year because our DEI team doesn’t even exist anymore,'” said Blavity’s Simone White, who declined to name specific companies. “Week to week, we have new contacts at companies, and folks we worked with for years to organize this work are no longer there.”
“To say our progress is not in peril would not be truthful,” AnitaB.org’s Wilkerson said, although she’s optimistic the tide could turn around in 2024. “We’re working with multiple challenges in our society, so we have made a lot of the progress but some of that was erased in the last year. Then you have this backlash against racial reckoning.”
The backlash she referred to includes things like the Supreme Court’s June decision to end affirmative action at colleges, as well as backlash against DEI programs in conservative circles. “You have this ‘wokeism’ drama.” Wilkerson said, pointing to Florida legislation such as banning books and downplaying Black history, as well as laws impacting the LGBTQIA+ community.
Because of that backlash, 2023 will be the last year the organization will hold Grace Hopper in Florida, Wilkerson said. It will be held in Philadelphia next year.
A Meta spokesperson said that it increased its engagement with some third-party organizations such as The Executive Leadership Council, which aims to increase Black leadership in C-suites.
DEI and AI
Wilkerson was among experts who told CNBC that DEI work is more important than ever given the growing work on artificial intelligence, which hit breakneck speed in 2023.
“We’re in a big technology inflection point, and what happens is as AI begins to take off and if organizations are less inclusive, the product is not reflective of the users,” Wilkerson said.
Apple, Google and other tech giants are still grappling with displaying and identifying images accurately. A New York Times investigation this year found Apple and Google’s Android software, which underpins most of the world’s smartphones, turned off the ability to visually search for primates for fear of labeling a person as an animal.
“We know that AI is trained on historic data and that historic data is missing critical segments of the population, and having women and noncentered folks as decision-makers is going to be critical to making sure it doesn’t happen again,” Wilkerson said.
White said companies who made cuts this year may have a difficult time building future relationships with DEI stakeholders, and it may impact their ability to attract and retain talent, should they decide to build up again in the future.
“Younger generations increasingly care who has a seat at the table,” White said. “And they’re going to remember who did what they said they were going to do.”
In this photo illustration, the Bluesky Social logo is displayed on a cell phone in Rio de Janeiro, Brazil, on September 4, 2024.
Mauro Pimentel | AFP | Getty Images
Micro-blogging startup Bluesky has gained over 1.25 million new users in the past week, indicating some social media users are changing their habits following the U.S. presidential election.
Bluesky’s influx of users shows that the app has been able to pitch itself as an alternative to X, formerly Twitter, which is owned by Elon Musk, as well as Meta’s Threads. The bulk of the new users are coming from the U.S., Canada and the United Kingdom, the company said Wednesday.
“We’re excited to welcome everyone looking for a better social media experience,” Bluesky CEO Jay Graber told CNBC in a statement.
Despite the surge of users, Bluesky’s total base remains a fraction of its rivals’. The Seattle startup claims 15.2 million total users. Meta CEO Mark Zuckerberg in October said Threads had nearly 275 million monthly users. Musk in May claimed that X had 600 million monthly users, but market intelligence firm Sensor Tower pegged X’s monthly base at 318 million users in October.
Created in 2019 as a project inside Twitter, when Jack Dorsey was still CEO, Bluesky doesn’t show ads and has yet to develop a business model. It became an independent company in 2021. Dorsey said in May of this year that he’s no longer a member of Bluesky’s board.
“Journalists, politicians, and news junkies have also been talking up Bluesky as a better X alternative than Threads,” wrote Similarweb, the internet traffic and monitoring service, in a Tuesday blog.
Some users with new Bluesky accounts posted that they had moved to the service due to Musk and his support for President-elect Donald Trump.
“It’s appalling that Elon Musk has transformed Twitter into a Trump propaganda machine, rife with disinformation and misinformation,” one user posted on Bluesky.
This is Bluesky’s second notable surge in the last couple of months.
Bluesky said it picked up 2 million new users in September after the Brazilian Supreme Court suspended X in the country for failing to comply with regional content moderation policies and not appointing a local representative.
Cisco CEO Chuck Robbins speaks at The Wall Street Journal’s Future of Everything Festival in New York on May 21, 2024.
Dia Dipasupil | Getty Images
Cisco reported a fourth straight quarter of declining revenue even as results topped analysts’ estimates. The stock slipped 2.5% in extended trading.
Here’s how the company did in comparison with LSEG consensus:
Earnings per share: 91 cents adjusted vs. 87 cents expected
Revenue: $13.84 billion vs. $13.77 billion expected
Cisco’s revenue dropped 6% in the quarter ended Oct. 26, from $14.7 billion a year earlier, according to a statement. Net income fell to $2.71 billion, or 68 cents per share, from $3.64 billion, or 89 cents per share, in the same quarter a year ago.
Networking revenue plunged 23% to $6.75 billion, slightly below the $6.8 billion consensus of analysts surveyed by StreetAccount.
Security revenue doubled to $2.02 billion, topping the StreetAccount consensus of $1.93 billion. Cisco’s revenue from collaboration was $1.09 billion, a bit below the $1.04 billion consensus estimate.
Cisco CEO Chuck Robbins said on the earnings call on Wednesday that orders from large-scale clients for artificial intelligence infrastructure exceeded $300 million in the quarter. Server makers such as Dell and HPE have also focused on sales of hardware that can help clients implement generative AI.
“We have earned more design wins and remain confident that we will exceed our target of $1 billion of AI orders this fiscal year from web-scale customers,” Robbins said.
Cisco has announced hardware containing Nvidia’s graphics processing units, which are widely used for training AI models, Robbins said.
“Over time, you’ll see us support other GPUs as the market demands,” he said. “But that partnership is still going fine. It’s still early. And I think 2025 is when we’ll start to see enterprise real deployment of some of these technologies.”
For now, enterprises are updating data center infrastructure to prepare for AI and the widespread deployment of AI applications, Robbins said.
U.S. government agencies have delayed deals with Cisco, rather than scrapping them altogether. The Fiscal Responsibility Act of 2023, which became law in June of last year, has limited U.S. government spending, said Scott Herren, Cisco’s finance chief.
Herren said that with Republicans poised to control the White House and both houses of Congress, he expects “to get a budget in place relatively soon.”
During the quarter, Cisco acquired security startups DeepFactor and Robust Intelligence.
Cisco lifted its full-year guidance to $3.60 to $3.66 in adjusted earnings per share on $55.3 billion to $56.3 billion in revenue, up from a prior forecast of $3.52 to $3.58 in EPS and $55 billion to $56.2 billion in revenue. Guidance would indicate projected revenue growth of 3.3% at the middle of the range.
Analysts expected adjusted earnings for the year of $3.58 per share on $55.89 billion in revenue.
As of Wednesday’s close, Cisco’s stock was up 17% year to date, while the S&P 500 index is up around 26% over that stretch.
Republican presidential nominee, former U.S. President Donald Trump, (C) greets attendees during a campaign stop to address Pennsylvanians who are concerned about the threat of Communist China to U.S. agriculture at the Smith Family Farm September 23, 2024 in Smithton, Pennsylvania.
Win Mcnamee | Getty Images
After Donald Trump won the U.S. presidency last week, tech CEOs including Apple‘s Tim Cook, Meta‘s Mark Zuckerberg and Amazon‘s Jeff Bezos publicly praised the president-elect.
One name was conspicuously missing: TikTok CEO Shou Zi Chew.
His absence was notable considering that of all the top tech companies, TikTok faces the most immediate and existential threat from the U.S. government. In April, President Joe Biden signed a law that requires China’s ByteDance to sell TikTok by Jan. 19. If ByteDance fails to comply, internet hosting companies and app store owners such as Apple and Google will be prohibited from supporting TikTok, effectively banning it in the U.S.
Trump’s return to the White House, though, may provide a lifeline for Chew and TikTok.
Although both Republicans and Democrats supported the Biden TikTok ban in April, Trump voiced opposition to the ban during his candidacy. Trump acknowledged the national security and data privacy concerns with TikTok in a March interview with CNBC’s “Squawk Box,” but he also said “there’s a lot of good and there’s a lot of bad” with the app.
Trump also leveraged TikTok’s shaky future in the U.S. as a reason for people to vote against Democrat Vice President Kamala Harris.
“We’re not doing anything with TikTok, but the other side is going to close it up, so if you like TikTok, go out and vote for Trump,” the president-elect said in a September post on his Truth Social service.
Since his election, Trump hasn’t publicly discussed his plans for TikTok, but Trump-Vance transition spokeswoman Karoline Leavitt told CNBC that the president-elect “will deliver.”
“The American people re-elected President Trump by a resounding margin giving him a mandate to implement the promises he made on the campaign trail,” Leavitt said in a statement.
Trump’s rhetoric on TikTok began to turn after the president-elect met in February with billionaire Jeff Yass, a Republican megadonor and a major investor in the Chinese-owned social media app.
Yass’s trading firm Susquehanna International Group owns a 15% stake in ByteDance while Yass maintains a 7% stake in the company, equating to about $21 billion, NBC and CNBC reported in March. That month it was also reported that Yass was a part owner of the business that merged with the parent company of Trump’s Truth Social.
TikTok’s CEO Shou Zi Chew testifies during the Senate Judiciary Committee hearing on online child sexual exploitation, at the U.S. Capitol, in Washington, U.S., January 31, 2024.
Nathan Howard | Reuters
If ByteDance doesn’t sell TikTok by the January deadline, Trump could potentially call on Congress to repeal the law or he can introduce a more “selective enforcement” of the law that would essentially allow TikTok to continue operating in the U.S. without facing penalties, said Sarah Kreps, a Cornell University professor of government. “Selective enforcement” would be akin to police officers not always enforcing every single instance of jaywalking, she said.
At TikTok, meanwhile, Chew has remained quiet since Trump’s victory, just as he had been in the lead-up to Election Day.
The Chinese-owned company may be taking a neutral approach and a wait-and-see strategy for now, said Long Le, a China business expert and Santa Clara University associate teaching professor.
Le said it’s hard to foresee what Trump will do.
“He’s also a contrarian; that’s what makes him unpredictable,” Le said. “He can say one thing, and the next year he’ll change his mind.”
TikTok didn’t respond to requests for comment.
Mark Zuckerberg, CEO of Meta testifies before the Senate Judiciary Committee at the Dirksen Senate Office Building on January 31, 2024 in Washington, DC.
Alex Wong | Getty Images
‘Facebook has been very bad for our country’
When it comes to social media apps, Trump’s campaign comments suggest he’s more concerned with TikTok rival Meta.
In his March interview with “Squawk Box,” Trump said Meta, which owns Facebook and Instagram, posed a much bigger problem than TikTok. He also said a TikTok ban would only benefit Meta, which he labeled “an enemy of the people.”
“Facebook has been very bad for our country, especially when it comes to elections,” Trump said.
But Trump’s negative views on Meta may have changed after comments by CEO Mark Zuckerberg over the past few months, Cornell’s Kreps said.
Zuckerberg described the photo of Trump raising his fist following a failed assassination attempt in July as “one of the most badass things I’ve ever seen in my life.” And after Trump’s win, Zuckerberg congratulated him, saying he was looking forward to working with the president-elect and his administration.
“My sense as an armchair psychologist of Trump is that he really likes people who sing his praises, and so his view on Zuckerberg and Meta, I would imagine, has changed,” Kreps said. “He might then just revert to his American economic nationalism here and say, ‘Let’s protect American industry and continue with the Chinese ban.'”
Meta didn’t respond to a request for comment.
Maintaining support of the TikTok ban could also win Trump political favor with lawmakers concerned about China’s global political and business influence, said Milton Mueller, a professor at Georgia Tech’s School of Public Policy.
“I don’t see him scoring big points politically by standing up for TikTok,” Mueller said, noting that few lawmakers, like Sen. Rand Paul, R-Ky., have opposed the ban.
Even if Trump does provide a lifeline for TikTok, it’s unclear how much damage that would do to his administration since many politicians are reluctant to publicly criticize him, Le said.
“They’re not going to challenge him because he just got so much power,” Le said.
Since launching his TikTok account in June, Trump has amassed over 14 million followers. Given his social media savvy, Trump may not want to make a decision that results in him losing the public attention and influence he’s gained on TikTok, Le said.