Google Ends Diversity Hiring Targets and Reviews DEI Programs

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Google has announced the removal of its diversity-based hiring targets, marking a shift in its approach to diversity, equity, and inclusion (DEI) efforts. The company also revealed that it is reviewing its DEI initiatives, joining other U.S. businesses that are scaling back similar programs.

In an email to staff, Fiona Cicconi, Alphabet’s chief people officer, explained that the company’s previous “aspirational” hiring goals, set in 2020, would no longer be pursued. These goals aimed to increase representation, particularly in offices outside of California and New York. In 2020, CEO Sundar Pichai had set a target to have 30% of Google’s leadership positions filled by people from underrepresented groups by 2025. However, recent updates on this goal were not provided in Alphabet’s annual filing to the SEC, which also saw the removal of a statement that previously emphasized the company’s commitment to diversity.

Google had been at the forefront of promoting inclusive policies, particularly after the 2020 protests against racial injustice. At the time, the company faced criticism from some within its ranks, including a prominent AI leader, who criticized the diversity efforts. Despite some progress in reaching its goals, such as meeting 60% of its five-year target, Google is now shifting its focus away from setting specific diversity targets.

The move has drawn backlash from some workers and activists, including Parul Koul, president of the Alphabet Workers Union (AWU), who criticized the company’s decision as a setback for progress made in the tech industry. Koul also expressed concerns over broader anti-worker trends, particularly from right-wing groups targeting DEI efforts.

In addition to its internal changes, Google is reviewing its DEI programs in light of recent U.S. court decisions and Executive Orders that have impacted federal contractors’ obligations around diversity initiatives. However, the company will maintain internal employee resource groups, such as “Trans at Google,” “Black Googler Network,” and “Disability Alliance,” which will continue to influence product and policy decisions.

This move aligns with similar actions taken by other major tech companies. Meta Platforms, for example, announced in January that it was ending its DEI programs, and Amazon also signaled a reduction in its diversity efforts.

 

Arm Lowers Full-Year Forecast, Shares Fall 6%

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Arm Holdings has revised its full-year revenue guidance downward, announcing that it will no longer meet the top end of its previous forecast. The chip technology provider, which has benefitted from the AI boom, reported a slight miss on its broader revenue expectations, sending its shares down by about 6% in extended trading.

Arm narrowed its revenue guidance for the full year to a range of $3.94 billion to $4.04 billion, down from the previous range of $3.8 billion to $4.1 billion. The company also adjusted its earnings per share forecast. Despite this, the company surpassed Wall Street’s expectations for the current quarter, with a forecast of $1.23 billion in revenue for the fiscal fourth quarter, compared to an analyst estimate of $1.22 billion.

CEO Rene Haas explained that the downward revision was due to the company being near the end of its fiscal year, providing more visibility on its final figures. Investors had been hoping for a more optimistic outlook, particularly with Arm’s technology being adopted for AI server chips and the increasing use of its higher royalty rate Armv9 design for smartphones.

Arm’s third-quarter revenue rose by 19% to $983 million, exceeding analysts’ expectations. The company continues to benefit from its widespread use in smartphones, including Apple’s latest iPhone, where its Armv9 chips are used. However, Arm faces challenges as it attempts to compete with its largest customers by raising prices and increasing royalties. Recently, the company encountered a setback in its attempt to secure higher royalties from Qualcomm, with the dispute culminating in a court case.

Arm’s participation in the U.S. government’s $500-billion AI infrastructure venture, Stargate, highlights its significance in the AI space. However, the company’s strained relationship with major customers like Qualcomm remains a challenge as it seeks to grow in new markets such as data centers.

 

Qualcomm Forecasts Strong Q2, Shares Drop After Licensing Outlook

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Qualcomm exceeded analysts’ expectations for Q1 sales and adjusted profits but forecast a more tempered outlook for its patent licensing business, sending its stock price down 4.8% in after-hours trading. The company reported Q1 sales of $11.67 billion and adjusted earnings of $3.41 per share, significantly outperforming the expected $10.93 billion and $2.96 per share. For the upcoming fiscal second quarter, Qualcomm projected sales of $10.75 billion and adjusted profits of $2.80 per share, both surpassing analysts’ expectations.

However, the company warned that its patent licensing business, which generates revenue from companies paying royalties for 5G technology, would not see growth this year after a deal with Huawei expired. This news caused some investor concern, despite positive projections in Qualcomm’s chip business. Licensing revenue for Q2 is forecasted at $1.35 billion, below the $1.43 billion analysts anticipated.

The market’s response was mixed, with Qualcomm’s shares dropping by 4.8% after the announcement. Investors have been closely monitoring Qualcomm’s involvement in the AI and smartphone markets, and while the company continues to secure major deals, such as with Samsung and Microsoft, the uncertain future of its Huawei agreement looms large.

Despite the dip in licensing revenue expectations, Qualcomm’s position in the smartphone, automotive, and IoT markets continues to strengthen. The company reported strong handset revenue of $7.57 billion, up 13% from the previous year, and its automotive chip sales saw significant growth, reaching $961 million.