Agencies are laying off chief diversity officers—inside the DEI cuts and what’s next

The role of chief diversity, equity and inclusion officer—a position that just four years ago, in the wake of George Floyd’s murder, was heralded as essential to transforming the advertising industry—has been in troubling decline, with agency holding companies eliminating or consolidating the position amid overall cutbacks in budgets and resources devoted to DEI. Now, some in the industry are fearful that DEI could suffer even steeper cuts after Donald Trump was elected president earlier this month, according to 17 diversity, talent and other ad leaders who spoke with Ad Age. Trump has proposed rolling back DEI efforts, including taking federal funding from public schools that address issues such as racism or gender in their curricula. The changing political environment has already prompted brands such as Meta, Tesla, DoorDash, Lyft, Home Depot, Wayfair and X to make cuts to their DEI teams. Other major marketers including Harley-Davidson, Tractor Supply, John Deere and Lowe’s are scaling back or dropping DEI initiatives. Agencies are now bracing for further cuts. “With the election outcome, it’s clear that the role of the chief diversity officer will continue to diminish at a corporate level,” said Tamon George, co-founder and CEO of Creative Theory Agency. That sends a signal to employees of color that diversity efforts were “never important in the first place,” said one former agency executive who was laid off earlier this year. Also read: Brands may lose billions of dollars by dropping DEI programs Reasons for the falloff DEI roles overall in the U.S. increased by 55% in 2020 following social injustice protests, according to the Society for Human Resource Management. But in recent years, there has been a slowing of these hires. As companies underwent layoffs and cut back on costs, the attrition rate for DEI roles was at 33% at the end of 2022, compared to 21% for non-DEI jobs, according to New York-based workforce analysis firm Revelio Labs. More current figures were not available. Part of the reason for the falloff: Companies didn’t invest or benchmark properly for the role to begin with, setting DEI leaders up to fail, according to the people interviewed for this story. So when agencies were forced to make cuts due to lost accounts or to boost earnings, these jobs were some of the first to go. These people also cited the wave of conservative lawmakers and activists lodging attacks on DEI across the country, making companies more cautious about how they frame their DEI roles and departments. They said the backlash has caused some companies to rebrand DEI jobs to bring initiatives such as sustainability under its remit, or do away with the role entirely. “It started with the Supreme Court’s decision to remove affirmative action,” said Kumi Croom, managing director for agency Duncan Channon and DEI advocate, referencing a U.S. Supreme Court ruling in June 2023 that effectively ended affirmative action in college admissions. “Then you start having debates over the meaning of words and—I’ve seen within organizations—what this commitment really means. Having it be an anomaly instead of just a norm, that is where people are really failing. This should not ever be an anomaly, it should be a norm—all you're trying to do is make sure that you are removing bias and that you are creating a space for everyone to belong.” Some agencies argue that there is less of a need for a DEI officer because, rather than “siloing” the role, shops have already embedded diversity and inclusion philosophies throughout their agencies, making it everyone’s responsibility. But several people, including executives at agencies that have cut the role, reject that idea, saying that the elimination of the chief diversity officer is having a negative impact on company morale and culture. Those people said they’ve seen their employee resource groups, established to help support workers of color, suffer since their chief diversity officer was laid off. Many people who spoke with Ad Age, including agency executives and consultants, said if the industry truly wants to have a diverse and inclusive workforce, agencies and marketers need to reprioritize this position. Also read: Employee resource groups are under scrutiny Further cuts on the horizon Diversity advocates are particularly concerned that the new presidential administration will give brands and agencies license to stop investing in diversity efforts. “Our contracts, strategies and tactics are now, more than ever, at the mercy of leadership to understand that equitable inclusion requires tactics that serve minorities and those that DEI initiatives were supposed to safeguard,” said Dawn Wade, managing partner and chief strategy officer of independent agency Nimbus. “We anticipate that brands will pull back and use the recent outcomes as an excuse not to do the work, or they will find clever ways to work around the implicit and explicit biases the incoming administration has been pushing.” Creative Theory Agency’s George, however, said the opposite could be true for companies that have made “a foundational commitment” to DEI. “I expect to see internal advocates doubling down on creating inclusive environments and processes, almost as a form of quiet resistance,” he said. “For them, advancing DEI will be an intentional act, reinforcing the values they believe in despite broader trends.” Ashish Prashar, a political strategist, human rights activist and former agency executive, most recently holding the title of global CMO of Interpublic Group of Cos. agency R/GA, said he doesn’t necessarily think Trump will “have that much of an impact” on DEI. Trump’s “mantra” has been to leave the decision of DEI to the states and individual companies, in a capitalistic fashion, he said. This could lead to CEOs who never placed a high priority on DEI using Trump as an excuse to make cuts, Prashar said. “Leaders will use Trump to say, ‘Oh we can’t do these things now,” he said. “That’s political cover, to not do something they didn’t believe in the first place.” Read about Ad Age’s 2024 Leading Women here DEI layoffs and lack of replacements Well before the election results, chief diversity officers were already facing layoffs at holding companies. Lea Taylor, who led DEI for Publicis-owned Razorfish, was impacted by the broader layoffs that resulted in the loss of 150 to 200 employees at the holding company’s digital experience agencies, Ad Age reported last month. Razorfish and Taylor declined comment. IPG Mediabrands consolidated individual agency DEI efforts within the network in April—now all DEI efforts for agencies under IPG Mediabrands, including UM and Mediahub, are handled by one group division. That led to the layoffs of executives including Michelle Gustilo-Smithson, Mediahub’s former VP and HR director of diversity, equity and inclusion, and Jeff Marshall, the former chief diversity officer and head of diversity, equity and belonging for UM Worldwide. An IPG Mediabrands spokesperson confirmed the consolidation efforts of its “people experience” function, which includes DEI. “Our goal was to deliver a more consistent, connected experience for all employees by ensuring they have access to the most impactful programs and talent initiatives that exist across our network,” the spokesperson wrote in an email to Ad Age. And although Omnicom’s DDB Global Chief Diversity, Equity and Inclusion Officer Nikki Lamba left on her own accord in June 2023, the agency did not replace her in the role. “Nikki made her own voluntary decision to leave,” a DDB spokesperson wrote to Ad Age in an earlier statement. “Her relationship with DDB was strong through to the end, where she agreed to work an extended notice period to ensure business continuity.” The spokesperson added that DDB has shifted DEI responsibilities “from a siloed practice,” and handed them to the existing people and culture team. “We will continue to closely partner with Omnicom [Chief Equity and Impact Officer] Emily Graham and our many talented, and diverse leaders across the DDB network to keep DEI&B a top priority.” Lamba declined comment. Gustilo-Smithson and Marshall could not be reached for comment. Best practices for inclusion Some agencies and industry groups maintain that eliminating or centralizing the chief diversity officer role could indicate a sign of progress. For some shops, said 4A’s CEO Marla Kaplowitz, DEI is more embedded throughout the entire agency and therefore is a priority for all C-suite leaders, versus one executive. During the height of the pandemic in 2020, agencies faced financial pressures and mass layoffs but were also hiring chief DEI officers because this foundation had yet to be established, Kaplowitz said. Ad Age reached out to all of the major holding companies for this story; most declined comment or argued on background that they were continuing to invest in DEI. An IPG spokesperson said that the holding company is doubling down on DEI with its launch of Rise—a set of tools that the holding company’s employees across agencies can use to build more diverse teams and drive growth for the company and clients. Under that program, IPG is also going to be launching a visualization tool called the Floominator, which R/GA built, that is being beta tested right now but can be used to create diverse visuals such as iconography for clients. “We’re making diversity an economic multiplier, just like creativity or gen AI,” the spokesperson said. Chief diversity officers essentially set DEI priorities for the entire company—they review and revise policies and make recommendations for promoting inclusion in hiring practices or even in the campaign the agency or marketer is putting out in the world. In the past, the role was siloed within HR, but it later was broadened as advertisers and marketers committed to making chief DEI officers part of every department. The idea was that inclusion would be embedded in everything the companies did—but whether that actually happened is questionable. IPG’s FCB Chicago said it’s been able to embed DEI throughout its agency, but it’s also not scaling back on the function. The way it did this was by first hiring Marc Wilson in 2020 to advise on inclusion both internally, in the way the shop approaches hiring and retaining its own employees, and externally, in the way client work is showing up in the world. As the executive VP, executive director of strategic inclusion, Wilson said he is part of the four-member DEI department. He works alongside HR practitioners on internal and talent-related matters, but he’s not siloed to HR. He said he reports directly to FCB Chicago CEO Kelly Graves and is brought in on agency pitches and the creative process to oversee the work, as often as the chief creative officer. Wilson said he is brought into every chemistry meeting with a potential new client, along with the CEO, the chief creative officer and the chief strategy officer. Clients “see this, [and know] DEI, strategic inclusion is a priority,” he said. Since Wilson was appointed, FCB Chicago has launched 10 employee resource groups and 66% of the FCB Chicago office participates in at least one. To date in 2024, 70% of FCB Chicago’s Black employees reported a strong sense of belonging, a 25% increase since 2020, according to the company, and 89% of FCB Chicago’s employees surveyed in 2024 reported that they feel the agency values diversity, equity, inclusion and belonging. According to the agency, the inclusion strategy Wilson leads with clients helped win brands including Great Wolf Lodge, Home Instead and Nature’s Path, and contributed to over $20 million in new business growth in the last year at FCB Chicago. FCB Chicago also pointed to “Love, Your Mind” as an example of a successful campaign that came together thanks to Wilson’s influence. The PSA (below)—a joint effort from FCB’s Chicago and New York offices, alongside the Ad Council, for the Huntsman Mental Health Institute in 2023—aimed to break down the barriers that exist for Black and Hispanic men to seek mental health support, and garnered 1.5 billion impressions. Having multiple teams work on DEI is not “a bad thing,” but agencies should have one point person (like FCB Chicago’s Wilson) to oversee the work to ensure it’s getting done, said Darren Martin, founder and chairman of integrated marketing firm Streamlined Media & Communications and founder and CEO of its subsidiary, Bold Culture, an inclusive marketing and workplace development consultancy. “Multiple people work on creative within an agency, but there's still a chief creative officer. An agency can have hundreds of strategists and there's still a chief strategy officer.” Martin praised WPP-owned VML’s approach to inclusion, which has seemed to separate its inclusion executive leadership into two parts: Tasha Gilroy is the global chief belonging officer and Ezinne Okoro is the global chief client and culture strategy officer (she was global chief inclusion, equity and diversity officer before VMLY&R merged with Wunderman Thompson in October 2023). Gilroy and Okoro said on a joint call with Ad Age that they while they work together, Gilroy is focused on internal, employee-related matters, and reports to VML’s chief people officer, whereas Okoro’s role is more client-facing and involves how to promote inclusion within the work the agency creates. Okoro reports to the agency’s chief client officer, but both executives said they have a direct line to VML Global CEO Jon Cook. Okoro said she both supports clients, as well as the agency’s teams, to ensure “everyone is doing their best to continue to increase representation everywhere … it’s all connected. In Tasha's world, [she’s] thinking about how we are elevating our people and our brand presence to get the best people to work for us and to stay there. And then because we have those best people in there, I can get those people thinking about how they work directly with our clients. It's a full circle, fluid” process, she said. Gilroy also praised VML for giving her and Okoro a seat at the table and room to voice their opinions on what the agency needs to do to progress DEI, both internally and externally. “We have access,” Gilroy said. “We have access to the executives, we have access to the client teams, we have access to the influential leaders that sit across the agency globally. Having access and being able to call things out, or to inform and educate, has been a tremendous way in how we partner with the executives across the agency.” Despite some agencies embedding DEI throughout their companies, some in the industry said they haven’t seen that practice widespread. Prashar, for one, said at the various agencies he’s worked, he never saw DEI embedded into the entire organization. “That’s bullshit.” Sometimes, one problem with keeping the role tethered to HR is that DEI officers are not given “specific” business goals, therefore their performance can’t be proved and tracked; so when layoff decisions are made, it’s an easy job to cut, Duncan Channon’s Croom said. “A lot of businesses [and] agencies got to work on this because of a moment in society, and if you weren't entering into it for the right reasons, it was never going to succeed,” Croom said. “If you didn't root it in agency and company goals, that role was always going to disappear with layoffs because you can't justify it.” Wilson said FCB Chicago has specific DEI goals every executive must meet, including in recruiting diverse employees. The shop also has inclusion guidelines to follow that steer how campaigns come together, “all the way from inception, to strategy, to the work, to production.” Okoro said her performance is tracked in a similar way a chief client officer is, based on specific new business and organic growth goals. Gilroy said her KPIs vary but she’s responsible for such things as adhering to certain government and client contracts that require the agency has diverse representation across teams. Ad Age Agency Report 2024 Revenue and analysis for agency companies Click here Few open roles However the function is set up, there are still many chief DEI executives impacted by layoffs who are reportedly left without work; one advertising talent recruiter said these jobs are scarce. The former agency diversity executive who was laid off this year said because there are not many open DEI roles, they have been applying to HR jobs. But this person, who spoke on condition of anonymity, believes they are not being hired because they have a background as a DEI lead. “I’ve applied to over 200 roles and I’ve gotten a handful of interviews, but nothing has been productive or fruitful,” the former DEI executive said. This person said they only got interviews after changing their title to reflect more of an HR-focused background than a diversity-centric one. Still, they said they wouldn’t hide that DEI would be a priority for her, and in one job interview, they asked the recruiter about the hiring company’s representation and other DEI efforts. The recruiter told the person: “‘I feel like this may not be the best opportunity for that.’” “It’s been a big learning curve for me,” the former agency DEI executive said. “I used to be able to apply for a job and pretty much get an offer and that is not the case [currently].” Impact on ERG The former agency DEI executive quoted above said that while their role remained within HR, they were still able to make a real impact. They said they founded and led many employee resource groups—which are also largely receiving backlash from conservative groups—for various diverse workers as well as task forces that provided monthly inclusion-based training and education for the entire agency. A senior-level employee who is still employed at the agency that laid off the DEI executive, said budgets have since been cut for the employee resource groups. “People were crying … [that executive] kept all the ERGs together,” they said, recalling the day the executive was laid off. The executive “had meetings with us” and was always finding ways for us to collaborate. It was felt very, very heavily.” “There is a lot of uncertainty. We really thought DEI was on the forefront after George Floyd. Now, budgets are taken away; it feels like it was all for optics,” this person continued. Most people interviewed for this story said these cuts will only exacerbate the industry’s existing problem with recruiting and retaining diverse talent. The Association of National Advertisers’ annual Diversity Report for the Advertising/Marketing Industry, which came out in February, found that diversity within the marketing industry dropped for the first time in several years in 2023: people of color made up 30.8% of the marketing industry last year, down from an all-time high of 32.3% in 2022. And a 4A’s study last year found that the number of agencies owned or run by white executives jumped to 90.2% in 2022 from 73% in 2021. Prashar said without chief diversity officers, agencies will likely continue to lose employees of color, and that will ultimately negatively impact the work. He said another issue to consider is AI. “Our industry is obsessed with AI right now,” he said. “There have been reports by credible publications that AI is already biased against people of color, women, all sorts. We need [DE&I leaders] in the room to help design something that is not biased, racist or sexist. That’s why DE&I is important.” Still, Creative Theory Agency’s George said the noise around generative AI is also overshadowing DEI, even if “one of the most important places” for diversity to be considered “right now is in the development and deployment of artificial intelligence.” “AI at this exact moment is the perfect scapegoat,” George said. “It’s taken all the air from every single room. It has conveniently shifted the attention away from the sometimes polarizing work that sometimes exists in DEI strategy.” What companies did wrong Companies made other key mistakes in setting up their DEI teams, outside of keeping them confined to HR, according to people interviewed. Some companies failed to invest in the right talent or didn’t support them with full teams, said Lisette Arsuaga, co-president and co-CEO of DMI-Consulting, a strategic marketing firm specializing in diverse segments, and co-founder of the ANA’s Alliance for Inclusive and Multicultural Marketing. “Too often, there weren’t strategies in place that supported these positions, or even full buy-in for the need for such roles,” Arsuaga said. “To make matters worse, many times diverse executives were hired to head DEI simply because they were diverse and not because they had [diversity, equity, inclusion and belonging] experience. The sum of these parts affected the success of these roles throughout corporate America and the perception of their need.” She said companies that had success and have continued to make progress have been “strategic, embraced the role, hired the right people and attributed the right KPIs to measure the impact.” AIMM will put together a playbook for companies on the right KPIs to track for DEI, but Arsuaga pointed to a key stat that advertisers and marketers should be conscious of as they invest in this space: “Culture is responsible for anywhere between 55%-66% of a campaign’s success.” “When a company doesn’t have the right representation in the room, it’s nearly impossible to get culture right,” she said. To be sure, there are companies continuing to invest in the DEI role. Nike’s new CEO, Elliott Hill, recently appointed Kizmet Mills as its new chief DE&I officer and VP. She was previously a senior director in the division and replaces James Loduca, who announced his departure at the end of the year in a LinkedIn post, writing he would be leaving to spend time with his family. Mills’ promotion comes as Hill oversees a reshuffling of staff and looks to position Nike for a turnaround after a year of declining sales and layoffs. “At Nike, we strive to be leaders in fostering a strong culture of belonging and believe that the work of our diversity, equity and inclusion team is critical to helping us achieve this mission,” a Nike spokesperson said in a statement to Ad Age when asked about its DEI efforts. Rebranding DEI There is also a “rebrand” of DEI that is happening across America due to the conservative backlash. Duncan Channon’s Croom said she’s heard discussions around companies wanting to drop the “E” for “equity” from DEI, for example, because “it was automatically getting tied to race. Why is equity only about race?” “People are just rushing to change the program so they don't get in trouble or it doesn't get any backlash,” she said. Creative Theory Agency’s George said he’s seen “less intensity” for brands and agencies to bring DEI into the conversation. “I’ve seen over the years, the start of DEI transitioning to a sustainability conversation,” he said, attributing that to a hesitancy from advertisers and marketers to “shine too bright of a spotlight” on the inclusive work they’re doing due to the current political environment. Calcium+Co. is a health communications group of marketing agencies and brands that recently rebranded its diversity, equity, inclusion and belonging team to the broader Social Impact Initiative, with a renewed focus on “allyship, social responsibility and cultural purpose.” The agency also eliminated its chief DEI&B role in that process. Melissa Morrow, partner and chief people officer, is now head of the Social Impact Initiative. Greg Lewis, group president and managing partner of Calcium+Co., said he felt by rebranding its diversity efforts to the Social Impact Initiative, it was making those efforts more inclusive. What now falls under that team is far-ranging, from accessibility to different social issues surrounding health care and access to health care. It’s something that can both have an internal and external impact, he said. “We didn’t want [the efforts] to be limited just to what letters we select,” added Nicole Camacho, an account supervisor who was made the Social Impact program director. “We purposely chose Social Impact because it goes beyond the conversation of what DEI is—the real big part that we want to embrace is the action and the output.” In some cases, Arsuaga said the rebranding of DEI can be “a survival tactic.” “We believe a rose by any other name would smell as sweet … that is to say, keep the work going by whatever means necessary as long as the pillars for diversity, equity, inclusion and belonging are part of the considerations,” she said. Still, “rebranding efforts can have a damaging impact internally on DEIB team brand recognition and credibility,” Arsuaga added. “As employees search for DEIB support, rebranded teams should ensure they don’t lose contact with those they serve … Diversity means everyone, and it’s through this important work that companies will see innovation and inclusive growth.” Contributing: Brian Bonilla

Agencies are laying off chief diversity officers—inside the DEI cuts and what’s next

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