Uber Technologies Inc. is in the midst of a workplace culture and branding crisis that if not remedied will make the company less desirable to diverse top talent — and will affect its bottom line.
The ride-hailing company said on Tuesday it fired more than 20 employees following a report by law firm Perkins Coie, which was hired to look into claims of sexual harassment, discrimination, bullying and other employee concerns. In February, former engineer Susan Fowler publicly accused the company of rampant sexual harassment and poor human resources practices.
Perkins Coie investigated 215 staff complaints, the majority from employees at its headquarters in San Francisco, going back as far as 2012, Uber said, taking action in 58 cases and no action on 100 more. Other investigations are continuing.
According to Reuters, Uber said that of the claims, 54 were related to discrimination, 47 to sexual harassment, 45 to unprofessional behavior, 33 to bullying and 36 to other things. The law firm has been working in parallel with a broader investigation by former U.S. Attorney General Eric Holder into company culture and practices.
There appears to be a correlation between the types of staff complaints and the lack of diversity at the company.
Blacks make up nearly 9 percent and Hispanics account for less than 6 percent of Uber's total workforce, according to the company's first-ever diversity report.
Uber released its first diversity report in March. The company’s makeup is predominately white, at just under 50 percent, while Asians are the second largest ethnic group at 31 percent. Blacks make up nearly 9 percent and Latinos account for less than 6 percent, according to the report.
However, when looking at just those employees with technical jobs, only 1 percent of Uber’s staff is Black and 2 percent is Latino.
Uber’s workforce overall is comprised of 36 percent women, but that number falls to 15 percent when looking at employees in technical roles.
Uber’s male-dominated culture is even reflected in its board of directors.
Last year Arianna Huffington, former executive editor and co-founder of The Huffington Post, was the first woman to join Uber’s board since it was founded in 2009. For seven years, the company did not have a woman on its board.
That’s where Uber’s workplace culture crisis may have began. DiversityInc Top 50 survey data found a correlation between women representation on boards and diversity-management performance. The DiversityInc Top 50 has a higher percentage of women on its boards than all other participating companies.
Uber announced the hiring of two senior female executives to fill a void left by recent departures, adding more diversity into its top ranks.
Frances Frei, a Harvard Business School professor, will serve as senior vice present for leadership and strategy, reporting to Chief Executive Officer Travis Kalanick.
Apple Inc. executive Bozoma Saint John will come aboard as chief brand officer.
“Boz has a long track record of successfully creating emotional connections between people and the products they love,” Kalanick said in a statement emailed to DiversityInc.
“Her creativity and deep understanding of consumers will allow us to build the same love and appreciation for Uber’s brand as we’ve built for Uber’s service.”
Saint John’s sudden resignation from Apple and move to Uber has the tech industry buzzing. Saint John, 40, is one of the few high-ranking Black female executives at Apple.
She joined Apple in 2014 when the company acquired Beats, for which she led marketing. In 2016 Saint John was appointed as a head of global consumer marketing for iTunes and Apple Music.
She made a splash in the tech industry last summer when she was the first Black woman to present at the annual Apple Worldwide Developers Conference. Since then she has gained a large social media following and was also reportedly well liked by her colleagues. But this year, Saint John was visibly absent from the conference, which began on Monday.
Like Uber, Apple also has a lack of diversity in its ranks. According to a diversity report, the company worldwide is 68 percent male. In the U.S., Apple is 56 percent white, 19 percent Asian, 12 percent Latino and 9 percent Black.
Uber and other tech companies are now scrambling to make adjustments as the impact of diversity and inclusion on the bottom line is evident.
At DiversityInc’s Top 50 Companies for Diversity event in May, CNBC reporter Bertha Coombs unveiled the DiversityInc Top 50 stock index and its comparison to the S&P 500 and Dow Jones Industrial Average.
“The companies that compete to earn a spot on the DiversityInc Top 50 – and the specialty lists — understand the importance of diverse workforces and management teams,” Coombs said.
“Research shows that these most diverse companies tend to actually perform better financially than the overall market. The Top 50 stock index, analyzed by CNBC’s market services group, shows that longer term, three to five years, those companies on the DI Top 50 list of the most diverse companies outperform the overall market by a healthy margin.”