THE NEW YORK TIMES: How businesses are navigating the diversity backlash

For nearly every American company right now, navigating the approach to diversity, equity and inclusion is a little like this: They’re perched on chairs, and the floor is lava, and the lava is the froth of lawsuits, investigations and social media backlash that could arise with any next step.

And they are not all responding the same way.

There’s a multilayered pressure campaign facing private sector DEI programs. First, President Donald Trump issued an executive order instructing the federal government to investigate “illegal DEI,” although it is not entirely clear what that term means. (The best guess lawyers have is that it means all programs, whether internships or mentoring workshops, that exclude people on the basis of race.) The Justice Department, in a memo last week, suggested that it would be involved in enforcing the DEI executive order.

Then, there are changes Trump has made at the Equal Employment Opportunity Commission, the independent agency that enforces anti-discrimination laws. This agency used to focus heavily on complaints of discrimination against people from minority groups and women. In an about-face, it is now likely to focus on investigating claims of discrimination against white workers and majority groups, in the form of DEI.

“Employers should be proactive and intentional about evaluating the way that they are carrying out these initiatives,” said Jocelyn Samuels, a Democrat whom Trump removed from the commission. “But at the end of the day, I think they are critical.”

The war on DEI has left executives scratching their heads about what posture to adopt — and what they choose depends on a whole smattering of factors, including the politics of their consumer base and their appetite for a fight. I’ll lay out the three main responses emerging in corporate America: retreating, quietly sticking with it and standing up for it.

Retreat

For companies like Target, the retreat from DEI goals and strategies has been sweeping. The suite of diversity goals, mentorship programs and racial justice initiatives announced with fanfare in 2020 has been tossed away as companies scramble to avoid legal scrutiny or a social media backlash.

This retreat began before Trump took office. Anti-DEI writing was already on the wall: The Supreme Court ruled against affirmative action in college admissions in 2023, and social media provocateurs like Robby Starbuck had begun targeting specific companies over their DEI programs. Walmart, in November, said it would stop using the term DEI in corporate communications and wouldn’t renew its Center for Racial Equity, a philanthropic initiative begun in 2020. Starbuck claimed this as a victory, saying he had reached out to the company to say he was planning a story on “wokeness” there.

In the days surrounding Trump’s inauguration, the DEI retreat camp ballooned. Meta, just before Trump took office, eliminated its chief diversity role and ended diversity hiring goals. Google abandoned its employee diversity targets, explaining that as a federal contractor it has to comply with the Trump administration’s DEI orders. Target said it would conclude its DEI goals, rattling some of the small-business owners who have been helped by its supplier diversity program.

Target finds itself being pulled from both directions. The company is facing calls for a boycott from some consumers who support DEI and are angry about the rollback. At the same time, it has been hit with a lawsuit from shareholders who say Target didn’t disclose all the risks it was assuming in having its DEI efforts in the first place.

Holding Steady

Some companies say they’re not making major changes to their DEI strategies, not necessarily because they’re loud and proud about supporting DEI, but because they feel the programs they have in place are legal and good for business.

JPMorgan Chase and Goldman Sachs have said they do not intend to retreat on their diversity efforts. For JPMorgan, that means trying to recruit and serve people of all backgrounds, as the bank has always done.

“There is nothing wrong with acknowledging and trying to bridge social and economic gaps, whether they be around wealth or health,” Jamie Dimon, the CEO of JPMorgan, wrote to shareholders in 2024.

DEI Stalwarts

The constellation of companies dropping DEI has its exceptions, notably including Costco. Before Costco’s annual meeting in January, a conservative think tank brought forward a proposal requiring the company to report the potential risks of keeping a DEI program. The board responded by delivering a defense of its diversity programs, which it said “enhance our capacity to attract and retain employees who will help our business succeed.”

Apple faced a similar anti-DEI proposal, which the company’s board called “unnecessary,” and described as an attempt at micromanagement.

But being a company that is proudly keeping up its DEI programming can feel lonely right now. Kyle Monson, partner in a small advertising agency called Codeword, said the agency had no plans to change its DEI programming, which includes working with recruiters to identify diverse job candidates, offering unconscious bias training for staff and also holding events and parties during Black History Month.

Monson said the agency was committed to the social value of DEI — but it’s about his company’s bottom line, too. He has spent years following research suggesting that increasing diversity in the workforce is good for business, he said.

And on top of all that, he’s ready for a fight: “We’re willing to eat the risk,” he said, “in a way that a lot of other companies might not be.”

This article originally appeared in The New York Times.

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