US tech giants are rolling back DEI. Its ripple effects could spill over to Europe.

Yahoo

05-02-2025

Big Tech companies like Meta and Amazon have been scaling back their DEI programs.
European tech industry insiders say the continent may follow the US' lead.
It could result in Europe's tech firms refining DEI policies, said Hannah Leach, partner at Antler.
Big Tech is rolling back DEI measures. Europe's tech sector is yet to feel the same pressure, but industry insiders expect some of the sentiment from the US to spill over across the Atlantic.
Meta and Amazon have recently scaled back their diversity initiatives amid a wider pushback against DEI in corporate America.
Founders and investors in Europe see it as an omen of what could transpire on the continent.
"The US can be a lead indicator of what could happen in Europe concerning diversity," said Rodney Appiah, managing partner at Cornerstone VC, a fund that backs underrepresented founders. "We recognize that we are probably four to five years away from that sort of translating into Europe and certainly into the UK."
Appiah pointed to the collaborative nature of the tech and VC industry and the UK's dependency on the US tech market. "The US narrative will eventually have a contributing factor to the way in which Europe moves," he told Business Insider.
Diversity, equity, and inclusion programs in Europe could come under pressure if big-name companies in the US continue to scale back initiatives, said Michael Smets, professor at Oxford's Said Business School.
That's because "global companies have global policies," Smets told BI. "The idea that Microsoft et al. would roll back DEI programs in the US, but not in Europe, seems naïve."
While Microsoft has not announced any recent rollbacks of DEI initiatives, the tech giant laid off a diversity, equity, and inclusion team in July.
European tech companies would also look to their larger peers in the US for "inspiration," Smets added.
"When leaders don't know how to navigate an uncertain, new situation, they are likely to copy leading organizations in their field," he explained. "Doing the same as Big Tech — whether right or wrong — is much more defensible than the bold choice of going against the grain," he added.
Some US corporate heavyweights, such as JPMorgan, have said they remain committed to DEI efforts.
Europe's tech companies may look to Silicon Valley for inspiration, but they have historically had different approaches to DEI.
European founders and investors often cite the benefits DEI efforts can bring.
"The return on investment on DEI has been forgotten about as everything has become politicized," Amardeep Parmar, cofounder of BAE HQ, a platform for British-Asian entrepreneurs, told BI.
He added that hiring from underrepresented groups gives companies access to a wider talent pool. That can lead to commercial benefits, Parmar said.
"People aren't so easy to fool, though, and you've got to match your words with your actions — we returned 3-8x for our sponsor organizations in 2024," he said.
President Donald Trump has issued executive orders to scrap DEI offices and positions throughout the federal government and revoked a civil rights-era Equal Employment Opportunity executive order. Trump, along with Elon Musk, has instead called for an approach that prioritizes meritocracy.
Radha Vyas, cofounder and CEO of travel startup Flash Pack, told BI that DEI initiatives could "level the playing field for everyone" to ensure people are promoted on merit.
She pointed to data-driven processes "such as blind CV screening and merit-based promotions — that focus on skills and performance rather than subjective factors or unconscious prejudice."
Europe's current political system could act as a buffer against the influx of anti-DEI sentiment in the US.
"The UK political environment is quite different to several other countries because we're one of the very few Western economies that has a left-leaning government in situ, and so that provides a bit of a defense to kind of our politics descending into sort of culture wars," Appiah told BI.
Still, the rise of populist parties in Europe could supercharge a wave of negative sentiment against home-grown diversity policies.
Ruth Foxe Blader, general partner at Foxe Capital, pointed to the "rising legitimacy of populist movements" in Germany, France, and the UK.
"It's a way of doing that negative virtue signaling that politicians perceive people want to hear right now, and it's going to take a lot of courage for leaders of large companies in Europe to contest that sentiment," Blader told BI.
Some quarters of Europe's tech scene believe that any shift from existing diversity programs in Europe could be channeled into meaningful change.
"We're likely to see a move away from performative, tick-the-box DEI activity and a move towards DEI actions that are material to, and specifically designed for, and properly integrated within, the businesses in question," said Hannah Leach, partner at VC firm Antler.
She added that the US could also prompt more urgent conversations and reframing of what DEI initiatives do and what they should look like in Europe.
Industry insiders are expecting a DEI reckoning for Europe's tech sector — it's just a matter of when.
"When America sneezes, the rest of the world catches a cold," Appiah said.
Read the original article on Business Insider