US companies ending programmes promoting diversity, equity and inclusion (DEI) in recent weeks have chimed with the political zeitgeist and tapped into public fatigue towards such schemes.
Meta, McDonald’s and Target are among those that have ditched DEI goals, prompting “anti-woke” activist Robby Starbuck to claim he was “enjoying every second of this”.
Yet while some companies are retreating from initiatives set up to improve the representation of their workforces, executive teams and boardrooms, others are doubling down.
Costco’s shareholders recently voted overwhelmingly to uphold the company’s DEI policies, while JPMorgan Chase has reaffirmed its commitment, tying inclusion directly to performance and innovation.
Despite the politicised language, workplace experts say most companies are likely to be striving to find a middle ground between abandoning programmes that had benefited them and positioning themselves as targets for conservative activists.
Jennie Glazer, chief executive of Coqual, a diversity think tank whose members are from Fortune 500 companies, says legal risks and polarised messages are causing leaders to pause and recalibrate. But members are more likely to be “reframing than retreating”, particularly as companies tighten spending.
One executive told her: “It’s not that our leaders don’t care – it’s that they’re exhausted by constant change and the feeling they must ‘get it right’ all the time.” Another, committed to inclusion policies, still described business leaders as “overwhelmed”.
Joelle Emerson, chief executive of Paradigm, a US diversity consultancy, identifies a mismatch between rhetoric and reality. “It looks like most companies are standing by their goals of creating fair, inclusive workplaces, while at the same time distancing themselves from a politicised acronym. The acronym is far less important than the work.”
According to a Paradigm report, between 2023 and last year, there was already “a 22 per cent decrease in Fortune 100 companies’ use of terms like ‘DEI’ and ‘diversity’”.
One financial services company told Glazer: “We know we have less to spend right now, but we’re focusing on doing fewer things better.” These include high-impact efforts such as sponsorship programmes.
Many companies [made] big gestures. Almost none are talking about it now that it’s out of the spotlight
— HR director in the financial sector
A fresh wave of corporate DEI initiatives was launched after the 2020 murder of George Floyd, which prompted companies to think more carefully about whom they hired and promoted. Some set voluntary goals for increasing the representation of women, ethnic minorities and other underrepresented groups. Others invested in internships and partnerships with organisations that focused on, for example, advancing black or Hispanic workers.
Businesses tied executive pay or bonuses to achieving DEI-related targets and appointed chief diversity officers.
The programmes were working. Emerson points to progress by companies, including Meta, which reported in 2022 that it had exceeded its 2019 goal of doubling the number of black and Hispanic employees in the US two years ahead of schedule.
“We also saw examples where companies pulled back on their efforts and there was a quick backslide on progress.”
But soon, the backlash started. Early critics argued DEI programmes prioritised race, gender or other demographic factors over merit, leading to preferential treatment for some workers. Others said DEI hiring and promotion practices may violate anti-discrimination laws by being biased against white applicants or male-led businesses.
Companies such as Disney, Target and Bud Light faced consumer boycotts over their inclusion-related marketing campaigns. Many senior leaders argued DEI distracted from business fundamentals.
“DEI efforts have irritated people, especially white men,” says Peter Cappelli, professor of management at the University of Pennsylvania’s Wharton School. Inclusion efforts, such as training, “sensitises you to your own biases which no one wants to hear”.
Other companies have been emboldened by Trump who, soon after his inauguration, issued a series of executive orders cutting federal DEI programmes promoting opportunities for underrepresented groups. Last Thursday, the US president attributed blame to DEI policies for the fatal crash between a commercial jet and military helicopter over Washington DC.
Alyesha Asghar, an attorney at workplace-focused law firm Littler Mendelson, says Trump’s deluge of executive orders spurred a wave of calls from clients. “A lot of employers are conducting privileged self-assessments of their DEI programmes and calibrating,” Asghar says.
Even those who back diversity efforts acknowledge the pitfalls of existing measures. One HR director in the financial sector identifies a broader diversity fatigue. “In society, there’s a tiring of talking about this.” She contrasts the climate today with five years ago. “Many companies [made] big gestures. Almost none are talking about it now that it’s out of the spotlight.”
Partly the fatigue reflects the ineffectiveness of some schemes.
An Axios/Harris Poll found that 57 per cent of Americans polled said DEI initiatives had had no impact on their career, while 16 per cent explicitly said they had been hindered. According to a report by the previous UK government last year, programmes lacked rigour and failed to track impact. “The collection of robust data and insights is rare,” it said.
However, a survey by AlixPartners found two-thirds of executives believe initiatives tied to social issues – including diversity, inclusion and human rights – have had a positive impact on their company’s economic performance.
One US-based risk management consultant that has advised firms including Walmart and GM, cites McDonald’s as an example of how schemes could evolve.
The restaurant chain had launched a DEI strategy to diversify its hiring in 2020, and later committed to doing 25 per cent of its spending with “diverse” suppliers. But this month, McDonald’s said that while its commitment remained “steadfast”, it was “retiring” some of these goals and renaming its diversity division the “Global Inclusion Team”.
Almost no one goes from truly caring about DEI to embracing the opposite agenda.
— Aneeta Rattan, professor of organisational behaviour at London Business School
Others are making greater efforts to align DEI goals with their core business, says Glazer. A global tech company, for example, has demonstrated that its diverse teams solved product design challenges faster than in the past. “Companies that connect [DEI] to business priorities are keeping the momentum alive, even in challenging climates,” she adds.
A new EY report urges companies to adopt a data-driven approach to diversity. The authors recommend rigorous measurement, including robust data collection, analysis and target-setting.
While the narrative has been centred around the US backlash, attention is also on whether the shift in sentiment will make its way to Europe.
“When the US sneezes the UK catches a cold,” says Asad Dhunna, founder of The Unmistakables, a consultancy that promotes inclusion. “However, when it comes to DEI we’re in a period of waiting to see just how immune we are to the Maga/Trump love over on this side of the pond.”
Corporate advisers say that in 2020, many UK companies and others set out DEI targets with a five-year time frame, which is now up. Businesses therefore have to decide how to approach it for a new era. Some are in a legal quandary, worried about implementing different policies for different parts of the world, according to an adviser to FTSE 100 companies.
Employers in the UK also have to consider potential legislative change, as the Labour government is proposing mandatory ethnicity and disability pay gap reporting.
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“If companies are considering pausing or retreating from their corporate DEI commitments, there may also be legal and commercial risks to consider,” says Laurie Ollivent, co-head of the diversity faculty at law firm Linklaters.
“Early indications we’re seeing suggest UK-based businesses or European businesses with a UK headquarters are sticking to the course,” says Dhunna. “[They] are holding firm on realising the business benefits of inclusion, which [are] customer and colleague growth and retention. This is particularly pronounced in the UK given the Labour government’s renewed approach to workplace rights.”
Even diversity advocates see the current political pushback as useful.
Aneeta Rattan, professor of organisational behaviour at London Business School, considers this “a clarifying moment.” She says: “If companies are rushing to embrace an anti-DEI agenda, then I wouldn’t consider this a change. Almost no one goes from truly caring about DEI to embracing the opposite agenda. Those making major shifts right now are simply showing us who they have always been.” – Copyright The Financial Times Limited 2025
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