Microsoft blames layoffs for drop in gender diversity

The company also reported a slight increase in racial diversity among its uppermost management

microsoft campus building

A building on the Microsoft Campus

Credit: Stephen Brashear/Getty Images for Microsoft

Microsoft has blamed a drop in its workforce's gender diversity on the thousands of layoffs it made to restructure its phone hardware business.

This year, women made up 26.8 percent of Microsoft's total workforce, down from 29 percent in 2014, the company reported Monday. Microsoft employed 5,701 fewer women this year compared to last, versus 5,316 fewer men.

In a blog post discussing the numbers, Gwen Houston, Microsoft's general manager of diversity and inclusion, said that while the firm made progress on other metrics, the decrease in women resulted from a business decision in the longer-term interest of the company.

"The workforce reductions resulting from the restructure of our phone hardware business ... impacted factory and production facilities outside the U.S. that produce handsets and hardware, and a higher percentage of those jobs were held by women," she said.

While the drop in female workers was most prominent in non-technical roles, Microsoft now employs a smaller or equal percentage of women across all its job categories compared to last year. The percentage of women in leadership roles was unchanged, while the company has fewer women working in technical, retail and factory roles compared to 2014.

Put bluntly, it seems like the phone hardware division that Microsoft acquired from Nokia and then subsequently downsized had a more gender diverse workforce than its remaining operations.

The drop in gender diversity isn't the only story the numbers tell. Microsoft's uppermost management ranks have become more racially diverse, with African-Americans making up 2.9 percent of corporate vice presidents, compared to 1.3 percent a year ago. That's likely only a few people, but it's a sign of progress at the top. Microsoft's senior leadership team is now 27.2 percent women, which is the greatest representation of women in that role in the company's history. 

As Houston pointed out, moving a large ship like Microsoft (with its nearly 116,000 employees) takes time, but the company is making progress on hiring from diverse groups, especially out of college. Worldwide, women made up 26.1 percent of its technical and engineering hires from universities, compared to 23.7 percent last year. That beats Microsoft's current technical workforce, which is almost 17 percent women. 

Compared to the broader education market, Microsoft seems to be making good progress on the gender diversity of its new hires out of school. According to the Computer Research Association, Women made up 14.7 percent of students who graduated during the 2013-2014 academic year with Bachelor's degrees in Computer Science, Computer Engineering and Information, and 28.7 percent of students who graduated with Master's degrees in those subjects. 

Microsoft's hiring of African-American and Hispanic employees from universities outpaced the graduation rate of students from those groups with Master's degrees, but underperformed relative to the number of students from those groups who graduated with Bachelor's degrees in Computer Science, Computer Engineering and Information. 

Overall, Houston said that she sees Microsoft's diversity work showing signs of improvement, but requiring more committed work from the company. It's hard for the firm to make big changes in the proportion of minorities that it employs, just because of its sheer size.

This isn't a Microsoft-only problem. Many tech companies talked a big game about their diversity initiatives last year, and said that they had plans to improve their employee metrics. And then, they ran headlong this year into the harsh reality that diversity numbers can't change overnight for companies without drastic personnel changes.

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