U.S. government scrutinizes Microsoft’s hiring practices as tech giant looks to boost diversity

Microsoft in June announced a sweeping racial justice plan, including an initiative to spend $150 million on diversity and inclusion programs, and double its number of Black and African American managers and senior employees by 2025 in the U.S.

Now the United States Department of Labor Office of Federal Contract Compliance Programs (OFCCP) is taking a closer look at the company’s hiring and whether it constitutes unlawful discrimination on the basis of race.

“We have every confidence that Microsoft’s diversity initiative complies fully with all U.S. employment laws,” Dev Stahlkopf, corporate vice president and general counsel at Microsoft, wrote in a blog post published Tuesday. “We look forward to providing the OFCCP with this information and, if necessary, defending our approach.”

The OFCCP asks Microsoft to “prove that the actions we are taking to improve opportunities are not illegal race-based decisions,” according to the company’s blog post.

We’ve reached out to the OFCCP to learn more about its inquiry and whether other tech companies were contacted. Google, Facebook, and others have made similar commitments in recent months.

Update: Here’s a statement from the OFCCP: “OFCCP appreciates Microsoft’s assurance on its website that it is not engaging in racial preferences or quotas in seeking to reach its affirmative action and outreach goals. OFCCP looks forward to working with Microsoft to complete its inquiry.”

The probe comes as President Trump aims to stop federal agencies from conducting anti-racism training. Trump signed an executive order last month on “combating race and sex stereotyping” in the federal workforce. Last week the Trump administration told federal agencies to suspend diversity training programs until they meet the guidelines laid out in the executive order.

Here’s more from Microsoft’s blog post:

“We are clear that the law prohibits us from discriminating on the basis of race. We also have affirmative obligations as a company that serves the federal government to continue to increase the diversity of our workforce, and we take those obligations very seriously. We have decades of experience and know full well how to appropriately create opportunities for people without taking away opportunities from others. Furthermore, we know that we need to focus on creating more opportunity, including through specific programs designed to cast a wide net for talent for whom we can provide careers with Microsoft.”

Microsoft in June also said that over the next three years it will double its number of Black-owned suppliers and spend an incremental $500 million with those companies; double its investment activity with Black-owned financial institutions, including a $100 million FDIC program; and establish a $50 million investment fund to support Black-owned small businesses.

It stands out as one of the most comprehensive and far-reaching initiatives announced by a tech company in response to the systemic racism and injustice exemplified by the killing of George Floyd and other Black Americans.

Black and African American employees made up about 4.5% of Microsoft’s U.S. workforce as of last year, up 0.4 percentage points, according to the company’s 2019 diversity and inclusion report. The company said at the time that 2.7% of its executives were Black/African American, not including acquired companies such as LinkedIn.

In a memo sent to employees in June, Microsoft CEO Satya Nadella said the company will expand and strengthen its leadership development program to ensure that Black and African American employees are better positioned to move into management and executive roles.

Workplace training on key issues related to race and diversity are now mandatory for all employees. Executives at the corporate vice president level will work with dedicated diversity and inclusion coaches “to confront and resolve systemic obstacles within their organizations,” Nadella said.

Google made its own diversity-related announcement in June, committing to “improve leadership representation of underrepresented groups by 30 percent by 2025” among other initiatives to “build sustainable equity for our Black+ community,” according to Google CEO Sundar Pichai.

Facebook said it would double the number of Black and Latinx employees by the end of 2023, and have 30% more Black people in leadership positions over the next five years.

Google, Facebook, Netflix, and other tech giants also said they would spend millions to support Black-owned businesses, entrepreneurs, and communities.Taylor Soper is GeekWire’s managing editor, responsible for coordinating the newsroom, planning coverage, and editing stories. A native of Portland, Ore., and graduate of the University of Washington, he was previously a GeekWire staff reporter, covering beats including startups and sports technology. Follow him @taylor_soper and email taylor@geekwire.com.

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