Microsoft updates policy, removes DEI from required employee assessment areas

Microsoft has scaled back the visibility of its diversity, equity and inclusion goals inside the company, removing DEI-linked criteria from employee performance assessments and pausing its annual diversity report. The Wall Street Journal reported that the move marks a notable change in how the tech giant measures accountability around workplace inclusion.

The company confirmed that DEI is no longer a mandatory component of employee evaluations. Under the revised system, staff will now set a smaller number of outcome-based goals, with security remaining the only required priority.While employees may still pursue inclusion initiatives, these activities will no longer influence performance ratings in the structured way they once did.

Microsoft has also stopped publishing its yearly diversity and inclusion report, which historically outlined representation trends, hiring data and progress on inclusion strategies. The company said it intends to share updates through “more flexible and engaging formats”, rather than a formal comprehensive report.

The shift echoes changes across parts of the US corporate landscape as companies recalibrate DEI efforts in response to political, legal and market pressures. According to Reuters, several firms have softened public-facing commitments or restructured internal programmes amid ongoing scrutiny.

Critics of Microsoft’s decision warn that removing mandatory metrics may make progress harder to measure and easier to deprioritise. Formal reporting and structured review criteria, they argue, have played an important role in sustaining long-term change within large organisations.

Microsoft maintains that its broader cultural expectations remain intact. The company said its commitment to an inclusive workplace has not altered, even if inclusion is no longer codified within annual performance reviews.

The muted shift raises a familiar question for the tech sector: can voluntary efforts and cultural signalling achieve what mandated metrics once enforced? With industry-wide debate surrounding the future of DEI, Microsoft’s next steps will be closely watched by employees, peers and policymakers alike.