Why Microsoft Has Scaled Back DEI in its Performance Reviews

Microsoft has removed diversity and inclusion from the criteria used to assess employee performance, ending a practice that had been embedded in its review system for half a decade.

The change means staff will no longer be required to set annual DEI-related goals or document their contributions towards improving workplace diversity as part of their performance evaluations.

Under the previous system, every employee had been expected to establish what the company termed a DEI Core Priority, selecting focus areas such as building inclusive products, participating in employee resource groups or practising allyship.

Those goals were then discussed with managers and reviewed during annual performance conversations, with employees required to demonstrate how they had advanced Microsoft's diversity objectives.

The revised structure now centres on simplified goal-based outcomes, with security remaining as the only mandatory component that all staff must address.

Inclusion efforts may still be pursued voluntarily, but they carry no weight in performance scoring and are no longer tracked in the same formalised manner.

The changes to Microsoft's annual reporting on DEI

Alongside the performance review changes, Microsoft confirmed it will not publish a diversity and inclusion report in 2025, bringing to a close a streak of annual disclosures dating back to at least 2015.

The October 2024 report, which ran to 44 pages, had included detailed workforce demographic data, pay equity analyses and information on employee turnover patterns across different groups.

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

Frank Shaw, Microsoft's Chief Communications Officer, told Game File the company was moving "to formats that are more dynamic and accessible – stories, videos and insights that show inclusion in action" rather than producing a traditional comprehensive document.

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

The internal response at Microsoft

The policy shifts have drawn mixed reactions from Microsoft employees, with some questioning the sincerity of the company's commitment to diversity initiatives.

One anonymous employee who had supported DEI efforts told media outlets that the mandatory goal requirement introduced five years earlier had felt "completely insincere and performative" from the outset.

Others pointed to CEO Satya Nadella's decision to invite Elon Musk on stage at this year's Build conference as evidence of shifting priorities, a move that reportedly caused internal tension.

A broader shift in approaches to DEI

Microsoft's adjustments mirror a wider recalibration across major technology firms, with several companies quietly scaling back formal DEI commitments in recent months.

In March, Google removed references to diversity and equity from its Responsible AI and Human Centred Technology team webpage, replacing terms such as "marginalised communities" and "underrepresented groups" with more generic language like "varied."

Meta confirmed earlier this year that it too would roll back DEI efforts, with VP of Human Resources, Jannelle Gale, writing in an internal memo that the term DEI had become "charged" and that initiatives faced heightened scrutiny in the current legal landscape.

The memo referenced a 2023 Supreme Court decision reversing affirmative action in academic institutions, a ruling that has cast uncertainty over corporate diversity programmes designed to support socioeconomically disadvantaged groups.

Questions of accountability

Without structured reporting requirements and mandatory performance metrics, observers have raised concerns about whether diversity progress can be adequately tracked or sustained.

Microsoft has maintained that its cultural expectations around inclusion remain in place even if they are no longer codified in formal review processes.

However, the shift from mandatory goals to voluntary participation raises questions about whether employees and managers will maintain the same level of engagement when diversity work no longer factors into career advancement.

The company's October 2024 report had shown modest gains in representation, with women comprising 31.6% of the core workforce and 5.7% of global employees self-identifying as having a disability.

It had also highlighted a 270% increase in employees voluntarily taking diversity and inclusion training courses since the DEI Core Priority system was introduced, a metric that may prove difficult to maintain without the performance review incentive.

The developments suggest that whilst Microsoft continues to position diversity as a priority in public statements, the mechanisms designed to drive accountability and measure progress are being quietly dismantled.