| President Donald Trump's rollback of what he calls "discriminatory equity ideology" started on his first day in office and continues even today, with a memo aimed at the foreign service. Bloomberg Businessweek Editor Brad Stone writes in Remarks for April's issue of the magazine about American companies' widespread withdrawal of efforts to diversify their workforces and leadership. Plus: The US shutdown of an app used by asylum seekers may benefit smugglers, and a discussion of how Elon Musk's businesses are faring. If this email was forwarded to you, click here to sign up. No company better illustrates the abrupt reversals and, as critics see it, the moral elasticity around DEI than Target Corp. After George Floyd was killed by police officers 4 miles from the company's Minneapolis headquarters in May 2020, the retailer wholly committed itself to the cause of diversity, equity and inclusion, announcing millions of dollars in donations to organizations supporting racial justice and social equity, and unveiling programs to increase its hiring of Black employees and spend more than $2 billion with Black-owned businesses. "I recognize it's time to take it to another level," Chief Executive Officer Brian Cornell said at the time. But this year, Target changed course. Already buffeted by criticism for featuring LGBTQ pride-themed merchandise in its stores, and then for capitulating to conservative groups by removing it, the company scaled back its DEI programs and suspended its minority-hiring goals and investments in minority-owned companies. A memo to employees from its chief community impact and equity officer cited the need to remain in step "with the evolving external landscape"—in other words, with the anti-DEI rhetoric and presidential orders pouring forth almost daily from the administration of Donald Trump.  A protest over Floyd's death took over a Target shopping cart corral in Minneapolis in May 2020. Photographer: Kerem Yucel/AFP/Getty Images Target is hardly alone when it comes to changing its tune on DEI. Since Jan. 21, when President Trump signed an executive order calling DEI "dangerous, demeaning and immoral," companies have treated it like a dietary fad suddenly found to pose mortal health risks. Among those pulling back: Alphabet and Charles Schwab removed DEI references from their annual reports, and McDonald's abandoned targets for diversity within its executive ranks. As part of its broader rightward shift, Meta Platforms Inc. ended programs to consider diverse candidates for open roles as well as all equity and inclusion training for employees. Walmart Inc. said it would no longer consider race or gender when granting supplier contracts and would eliminate its use of the term "Latinx." Goldman Sachs Group Inc. scotched a program requiring the companies it guides through initial public offerings to have at least one female and two diverse board members, saying the policy had already served its purpose. A few companies have defended their DEI practices, Costco Wholesale Corp. and Cisco Systems Inc. among them. Some are continuing the work they still deem important but are doing it more quietly and using different terminology, to better conform to Trump's edicts. But many others "are very aggressively saying, 'We didn't mean it,'" says Stacey Abrams, the former Georgia state representative and Democratic gubernatorial candidate and founder of the advocacy organization American Pride Rises. "That is moral cowardice. They are saying no to the very people who make their companies work." The mass corporate retreat on DEI disrupts 60 years of attempts by the US government to stamp out exclusionary practices and expand opportunities for minorities and women in business. With Title VII of the Civil Rights Act of 1964, companies steeped in American traditions of racism and sexism were told they couldn't use race or gender to discriminate in employment. DEI, as it came to be known during the administration of Barack Obama and then broadly after Floyd's murder, was designed to fix more entrenched forms of unfairness, such as the stubbornly low percentage of female, Black and Hispanic executives. There's been only modest progress: Women accounted for 36% of senior executives in 2023, an increase of 5 percentage points from 2020, according to data submitted to the Equal Employment Opportunity Commission (EEOC) and analyzed by Bloomberg News. Gains for Black men were even slimmer; they accounted for only 3.2% in 2023, an increase of 0.33 percentage point. For the past few years, right-wing activists and attorneys have argued that there are already existing laws against employment discrimination and that the effort to fix social disparities itself constitutes a form of discrimination and an unlawful attempt at social engineering. A 2023 Supreme Court ruling against Harvard College, which struck down affirmative action at universities and colleges across the US, supercharged their efforts. "If it was wrong to treat student applications differently because of race or ethnicity, then it must follow that it is wrong to treat any employee or job applicant differently," says Edward Blum, the Texas legal activist who brought the case. His group, the American Alliance for Equal Rights, is pressing the cause by suing American Airlines Group Inc., Southwest Airlines Co. and other companies over their DEI policies. District courts are challenging Trump's executive orders, and DEI proponents are quick to point out that the law itself hasn't changed. Fighting discrimination, they say, is still perfectly legal. Still, the weather around DEI in the workplace has darkened significantly. Companies that earnestly devised mentorship or internship programs designed for minorities or women, for example, or that tied executive compensation to achieving diversity goals must now consider the possibility that those programs could be deemed illegal—and become targets for Republican-affiliated law firms or even Trump's Department of Justice. "I have talked to general counsels in companies who are freaked out about this," says John Yoo, a law professor at the University of California at Berkeley who advises companies on legal strategies. Among proponents of DEI, the mood is almost funereal. There are more than 400 US government agencies and an average of two DEI specialists in each, says Douglas Melville, an author and DEI adviser. In late January the Trump administration announced plans to fire all of them. In C-suites the situation is similar. DEI has "become a scarlet letter for practitioners," Melville says. Workers who once felt seen and appreciated by their companies are wrestling with a sense of betrayal. "A lot of employees, particularly from underrepresented backgrounds, are feeling abandoned," says Joelle Emerson, CEO of Paradigm, which advises firms on diversity and inclusion strategies. "Companies seem to be saying they no longer care if you stay or go." At the same time, there's recognition within the DEI community that it may be partly the victim of its own excesses. Companies that subjected employees to endless sensitivity trainings or internal debates over whether, say, the term "all-hands meeting" discriminates against those with disabilities may have simply exhausted their workers. Many never demonstrated how these issues were linked to their overall goals or how they might improve the prospects for their workers. Moreover, companies that went beyond trying to ensure a "diverse slate" of candidates for job openings and established specific targets for hiring from certain ethnic groups had, in effect, set up quota systems that are indeed illegal. But by casting aside all of DEI, Trump and his fellow conservatives are purposefully hampering the pursuit of a more equitable workplace. The EEOC, created in the 1960s to fight discrimination in business, collects data from companies with at least 100 employees on the racial and gender makeup of their workforces. Project 2025, the conservative Heritage Foundation's blueprint for Trump's second term, recommended scrapping these annual surveys, and in January the EEOC and its new Republican chairwoman announced they'd refocus the agency on fighting the immigration crisis and combating bias against American-born workers. If the EEOC stops collecting employment data, we'll no longer be able to define the scope of inequities in the US workforce, much less remedy them.  Robby Starbuck organizes social media campaigns to stop corporate DEI efforts. Photographer: Bess Adler/Bloomberg Conservative activists say that they're all for equity and fairness and that they're simply battling a divisive and ineffectual trend in corporate culture. "I want companies to be a place where anybody can go to work, somebody who's a socialist and somebody who's far right," says Robby Starbuck, who's organized social media campaigns to force John Deere, Tractor Supply, Walmart and other companies to drop their DEI initiatives. "This is saying to companies: Get out of that four-year cycle where you're a prisoner to politics and instead you're neutral." For their part, DEI evangelists say that building fair and inclusive companies remains a noble and generally popular goal, even if there's disagreement about how to get there. And they argue there's a powerful trend on their side: In as little as 17 years, minorities will constitute a majority of the US population. Companies seeking to build and maintain a heterogeneous workforce that can appeal to a wide and varied base of customers will eventually have to acknowledge this. "Pretty much all companies know that they can't go backwards if they want to be successful in the future," says Vernā Myers, who served as vice president for inclusion at Netflix Inc. until 2023 and is now a DEI consultant. If the companies that have truly abandoned the principles of DEI one day try to clamber back onto the bandwagon, the workers and customers who remember the current retreat may be too cynical to trust them. |
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