A lot of companies in the US are silently discarding their Diversity, Equity, and Inclusion (DEI) initiatives following the Trump Administration’s executive order with respect to such norms. The companies have realised that ‘DEI’ is a politically loaded term and is not seen favourably by the newly elected US President Donald Trump who has called such efforts as “radical and wasteful.”
Many companies like Google, Meta, Walmart, Amazon, and Accenture, among others made large public announcements of rolling back their DEI efforts.
Earlier this month, Accenture had announced that it was rolling back its diversity, equity, and inclusion (DEI) goals. As per The Guardian, Sweet stated that Accenture would start “sunsetting” its diversity goals that were adopted in 2017, along with career development programs for “people of specific demographic groups.” The memo also mentioned that DEI policies would no longer be used to assess the performance of an employee and that the company would stop submitting data to external diversity benchmarking surveys. Sweet has also mentioned that Accenture would “evaluate external partnerships on diversity as part of refreshing our talent strategy.”
In a statement to the Associated Press, Google had stated that, “We’re committed to creating a workplace where all our employees can succeed and have equal opportunities, and over the last year we’ve been reviewing our programs designed to help us get there”.
“We’ve updated our 10-K language to reflect this, and as a federal contractor, our teams are also evaluating changes required following recent court decisions and executive orders on this topic,” the company added.
On the other hand, many companies are taking a silent route to do the same. For example, in its annual financial report, Disney shortened its DEI section by removing mentions of employee development programs and fellowships for underrepresented talent. It added a mention of Heroes Work Here, which is an initiative to hire and train US military veterans.
PepsiCo’s latest annual report also excluded a breakdown of its workforce demographics as well as a line about how it believes its culture of diversity, equity and inclusion is a competitive advantage that fuels innovation, enhances its ability to attract and retain talent and strengthens its reputation.
General Motors completely cut out the DEI section of its annual report, despite having claimed to be “the most inclusive company in the world” in its 2023 report. Similar strategy was followed by Mondelez International.
Philip Morris International significantly shortened its DEI section, renaming it “collaborative culture”. Pinterest renamed its “inclusion and diversity” section as “inclusion and belonging”. And Chipotle swapped “diversity, equity & inclusion” for “culture and inclusivity”.
Tightening of Diversity norms by Trump Administration
This decision is as a result of recent executive orders issued by President Donald Trump targeting DEI programs across the federal government and private sector.
According to reports, President Trump’s recent executive order has threatened to impose financial sanctions on federal contractors deemed to have “illegal” DEI programmes. If the companies are found to be in violation, they could be subject to huge damages under the 1863 False Claims Act. The law states that contractors who make false claims to the government could be liable for three times the government’s damages.
The challenge for companies is knowing which DEI policies the Trump administration may decide are “illegal”.
Implications
Supporters of this shift have argued that moving away from DEI programs will promote a meritocratic work environment, wherein hiring and promotions will be based solely on skills and performance rather than demographic factors. This will help in improved efficiency and growth. Furthermore, this will also benefit the companies owing to reduced exposure to lawsuits related to affirmative action policies.
However, the critics have warned that scaling of DEI policies will prove to be highly negative, as it could lead to declining workplace diversity, limiting innovation and reducing the range of perspectives within organisations. Furthermore, the companies that are scaling back their DEI policies might suffer a setback among their stakeholders, as several studies have revealed that people are prioritising sustainability, corporate social responsibility, and good corporate citizenship behaviour by companies.
