Satya Nadella says Microsoft “will use our balance sheet and engagement with suppliers and partners to extend the vision for societal change throughout our ecosystem.” (Geekwire Photo / Kevin Lisota)

Over the next three years, Microsoft says it will double its number of Black-owned suppliers and spend an incremental $500 million with those companies; double its investment activity with Black-owned financial institutions, including a $100 million FDIC program; and establish a $50 million investment fund to support Black-owned small businesses.

Internally, the company says it will spend an additional $150 million on diversity and inclusion programs, and double its number of Black and African American managers and senior employees by 2025 in the United States.

Those are some of the ways the company is planning to leverage its financial horsepower to address racial injustice, part of an ambitious plan outlined by Microsoft CEO Satya Nadella in a message to employees this morning.

It stands out as one of the most comprehensive and far-reaching initiatives announced by a tech company in response to the systemic racism and injustice exemplified by the killing of George Floyd and other Black Americans.

Microsoft is in a position of extraordinary financial strength, with more than $137 billion in cash and short-term investments as of the end of March, and a market value of more than $1.5 trillion.

The time and attention of the company’s leaders and employees is an especially scarce commodity in the midst of the COVID-19 pandemic. In addition, Microsoft has committed to following through on a massive environmental initiative, announced in January, that aims to make the company not just carbon neutral but carbon negative by 2030,  removing more carbon from the environment than it emits each year.

But Nadella’s memo makes it clear that Microsoft sees racial justice as a top priority.

“With significant input from employees and leaders who are members of the Black and African American community, we have developed a set of actions that we believe are both meaningful to improving the lived experience at Microsoft, as well as driving change in the communities in which we live and work,” he wrote.

He added, “We will use our balance sheet and engagement with suppliers and partners to extend the vision for societal change throughout our ecosystem, creating new opportunities for them and the communities they serve.”

Adapted from Microsoft’s 2019 Diversity and Inclusion Report, Page 15. Does not include acquired companies that operate largely independently, such as LinkedIn and GitHub. Gender data is global, racial/ethnic data is US only.

Inside the company, Microsoft has been making incremental progress on racial and gender diversity, and releases more data than other companies in the industry, but has consistently acknowledged that it has significant work left to do. Nadella instituted an HR overhaul last year after women at Microsoft detailed incidents of sexual harassment.

Black and African American employees made up about 4.5% of Microsoft’s U.S. workforce as of last year, up 0.4 percentage points, according to the company’s 2019 diversity and inclusion report. The company said at the time that 2.7% of its executives were Black/African American, not including acquired companies such as LinkedIn.

In the memo Tuesday morning, Nadella said the company will expand and strengthen its leadership development program to ensure that Black and African American employees are better positioned to move into management and executive roles.

Workplace training on key issues related to race and diversity will become mandatory for all employees in the company’s next fiscal year, starting in July.

Executives at the corporate vice president level will work with dedicated diversity and inclusion coaches “to confront and resolve systemic obstacles within their organizations,” Nadella said.

The plan also outlines several community initiatives, including 1) a five-year $50 million expansion of the company’s work in law enforcement and criminal justice reform; 2) an expansion of the TEALS computer science education program into more Black and African American high schools; 3) work to expand broadband and device access in communities of color; and 4) additional support for nonprofit organizations led by people of color.

Read Satya Nadella’s full email here.

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