Financial Crisis Puts Diversity Gains at Risk

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Staffers also tried to contact alums who have been personally affected by the layoffs, and they will be helping them find job leads in the coming months, said Elissa Ellis-Sangster, the group's executive director.

Apart from the direct impact of layoffs, diversity advocates fear many financial firms will eliminate or cut back human resources or diversity programs. Ellis-Sangster said she has already seen the departure of some top diversity advocates at several leading investment firms and worries that there will be more to come in the next few months. "It's more that the people that are gone are the ones who were around for years and knew the place and really got what diversity was about," she said. "There's going to be a lot more scrutiny at these companies. If they keep pulling staff, they can't always justify keeping the programs and partnerships they are supporting."

Much at Stake

Also at stake is continued corporate sponsorship of diversity organizations. For instance, Management Leadership for Tomorrow, an organization that trains black, Hispanic, and Native American young people for business leadership positions, lists insurance giant American International Group (AIG) and investment banks Lehman Brothers, Merrill Lynch, and Goldman Sachs (GS) as among their corporate sponsors. (McGraw-Hill (MHP), publisher of BusinessWeek and owner of investment ratings and research firm Standard & Poor's, is also a corporate sponsor.)

Amanda Roberts, MLT's vice-president for marketing and business development, said she's concerned but hasn't seen any direct impact so far. "We're still being cautious, because we have a number of partners in the financial services sector. But our portfolio as a whole is very diverse, with partners like Google (GOOG), Kraft (KFT), and PepsiCo (PEP)."

Ella L.J. Edmondson Bell, a professor at Dartmouth's Tuck's School of Business who runs Ascent, a nonprofit dedicated to helping multicultural women rise to top management positions, said she is keeping a close eye on how the financial crisis will affect her group's members.

Recent Gains Can Be Lost

Only 6.3% of the U.S. corporate managers are women of color, according to the EEOC. Bell said companies are going to have to work hard to maintain those numbers. "The last to enter are the first to leave," she said. "If I'm at the bottom of the pecking order because of when I've come into the company, then guess what? That makes me more vulnerable, and women are more vulnerable, particularly women of color."

Bell said the woman who oversees diversity programs at one New York bank has told her she is trimming programs. "It's because of the economy," Bell said.

Bell is making the rounds at companies to make sure they maintain their diversity programs. She and her staff will soon talk to executives at companies such as American Express and PepsiCo about how her group can continue to work with them, and they plan to visit more companies in the coming weeks.

"In this environment, companies are going to have to be very, very savvy and very smart in terms of maintaining talent in their pipeline that is not just white males and even white females," she said. "If you want to really be ahead of the curve in your workforce, you have to pay attention to demographics."

Damast is a reporter for BusinessWeek.com. Macsai is a writer for BusinessWeek.