Why is Microsoft Rolling Back its DEI Commitments?

Microsoft has adjusted the criteria for its employee performance reviews, removing diversity and inclusion (DEI) as a mandatory component. 

This change concludes a five-year period where staff were required to set and document annual goals related to diversity, equity and inclusion as part of their formal evaluations.

Previously, employees were tasked with creating a DEI Core Priority. 

This involved choosing specific focus areas such as fostering inclusive product development, participating in employee resource groups or actively practising allyship. 

These objectives were discussed and reviewed with managers during annual performance conversations, where employees had to show how their actions had supported Microsoft's diversity targets. 

The updated performance structure now centres on simplified goal-based outcomes. 

Security is the only mandatory element that all staff must address in their reviews. 

While employees can still pursue inclusion-related activities on a voluntary basis these efforts will no longer be formally tracked or contribute to performance scores.

Adjustments in DEI reporting

In a related move Microsoft has confirmed it will not issue a diversity and inclusion report in 2025. 

This decision ends a practice of annual disclosures that Microsoft had maintained since at least 2015. 

The latest report, released in October 2024, spanned 44 pages and contained detailed workforce demographic data, pay equity analysis and information on employee turnover across various groups. 

At the time of its publication Microsoft's Chief Diversity Officer Lindsay-Rae McIntyre described it as "our most global and transparent report to date" noting it was Microsoft’s sixth consecutive annual global diversity report. 

Frank Shaw Microsoft's Chief Communications Officer told Game File that Microsoft was shifting "to formats that are more dynamic and accessible – stories, videos and insights that show inclusion in action" instead of producing a single comprehensive document. 

"Our mission and commitment to our culture and values remain unchanged: empowering every person and organisation to achieve more,” he added.

Internal culture and employee response

The changes to performance metrics and reporting have generated varied reactions among Microsoft employees. 

Some have questioned the depth of Microsoft's commitment to its diversity initiatives. 

One anonymous employee who had been involved in DEI efforts told media outlets that the mandatory goal requirement had felt "completely insincere and performative" since its introduction five years ago. 

Other employees pointed to CEO Satya Nadella’s decision to feature Elon Musk at this year's Build conference as a signal of evolving priorities, a move that reportedly created internal discussion. 

A broader industry trend

Microsoft’s policy adjustments are part of a wider trend across major technology firms which have been reassessing their formal DEI commitments. 

In March, Google altered the webpage for its Responsible AI and Human-Centred Technology team, removing specific references to diversity and equity. 

Terminology such as "marginalised communities" and "underrepresented groups" was replaced with more general language like "varied”.

Similarly, Meta announced earlier this year that it would be scaling back its DEI efforts. 

In an internal memo Jannelle Gale, Vice President of Human Resources, wrote that the term DEI had become "charged" and that such initiatives were facing increased scrutiny in the current legal environment. 

The memo alluded to a 2023 Supreme Court decision that reversed affirmative action in university admissions, a ruling that has created uncertainty for corporate diversity programmes aimed at supporting socioeconomically disadvantaged groups. 

Without formal metrics observers have raised concerns about how diversity progress can be sustained. 

Microsoft's October 2024 report showed a 270% increase in employees voluntarily taking diversity and inclusion training courses since the DEI Core Priority system was introduced, a figure that could prove challenging to maintain without the performance review incentive.