• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

2

As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch

3

Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster

1

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

2

As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch

3

Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster

The right – and wrong – way to do layoffs

By
February 5, 2014, 4:18 PM ET
Add Fortune on Google for similar content.

FORTUNE — At first glance, the link between layoffs and diversity may be far from clear. But a new study suggests the two are closely connected.

It turns out that, if you want more diversity (particularly more women and African-Americans) in the senior ranks, letting people go on the basis of their performance, not their position, is the way to go.

The study, which was published in the February issue of the American Sociological Review, also found that layoffs determined by job title have become more widespread. That means companies that occasionally lay off large numbers of employees are increasingly (and inadvertently) hamstringing their diversity efforts.

MORE: The new Fiat Chrysler faces a rougher road than most think

Consider: The average employer in the 22-year study of 327 U.S. companies laid people off according to their position or their tenure with the company, rather than laying off those with the lowest performance evaluations. Using job title as the criterion cut women and African-Americans’ share of management jobs in those companies by 20% to 25%. Moreover, employers who laid off employees according to their tenure with the organization ultimately reduced the number of women in senior roles by about 20%.

By contrast, when performance was the criterion, the number of women and African-Americans on the fast track to the top remained the same after the layoffs as before.

“Downsizing now is usually done in ways that hit managerial diversity the hardest,” notes the study’s author Alexandra Kalev, who teaches sociology and anthropology at the University of Tel Aviv. “If these trends continue, women and minorities will become increasingly rare in management jobs.”

Why does predicating layoffs on performance have such a powerful effect? “It seems that the more individualized process of evaluating each worker on his or her merits, rather than using blanket criteria such as position or tenure, creates awareness and accountability among executives,” Kalev says. “It motivates them to think more deeply about who they should keep during a downsizing.”

Basing job cuts on performance “is not only good for managerial diversity,” she adds. “It’s also good for the future of the company overall, because only the best performers are kept.”

MORE: For Google, a leg up in the artificial intelligence arms race

One more suggestion from the study’s findings, for companies intent on giving diversity a boost: Use in-house lawyers, not legal help from outside.

“I was surprised by the fact that internal legal counsel made such a big difference” in diversity after a downsizing, Kalev says. The study showed that “in-house attorneys raised awareness of diversity issues among executives,” which in turn caused them to apply “tools such as repositioning and retraining to maintain managerial diversity, while outside legal experts did not.”

Add Fortune on Google for similar content.

Latest in blogging

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Most Popular

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
Success
MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
By Sydney LakeJune 25, 2026
7 days ago
As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch
Big Tech
As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch
By Marco Quiroz-GutierrezJuly 1, 2026
14 hours ago
Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster
Success
Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster
By Preston ForeJune 27, 2026
4 days ago
Elon Musk on MacKenzie Scott giving away $26 billion of her fortune: 'Sadly,' it makes the world a worse place
Success
Elon Musk on MacKenzie Scott giving away $26 billion of her fortune: 'Sadly,' it makes the world a worse place
By Sydney LakeJune 29, 2026
2 days ago
The Supreme Court's birthright citizenship ruling hands the U.S. economy a $7.7 trillion win
Newsletters
The Supreme Court's birthright citizenship ruling hands the U.S. economy a $7.7 trillion win
By Diane BradyJuly 1, 2026
12 hours ago
The U.S. Army is opening military bases to private billions — here's why that changes everything for the next 250 years
Commentary
The U.S. Army is opening military bases to private billions — here's why that changes everything for the next 250 years
By Marc AndersenJune 30, 2026
1 day ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.