Mita Mallick, an author and diversity, equity and inclusion leader, published a book about workplace inclusion in October. Since then, she said, one company has invited her to its leadership summit, but two others — one of which had already ordered copies of her book — canceled book talks they’d planned with her, telling her that company leaders, suddenly, were no longer comfortable.
“It’s either the best or worst time to launch a book like this,” Mallick said.
Over the past year, corporations have grown more cautious about following through on DEI efforts as businesses cut costs and conservative activists, lawyers and lawmakers seek to purge the concept from workplace life. That caution, along with the Supreme Court’s ruling last year ending affirmative action in college admissions, has created more speculation over how DEI work might change — and what might be lost in the process.
Experts say that as the U.S. population grows more diverse and companies that stick with this work attract a wider range of talent and reap the financial benefits, DEI isn’t going anywhere.
But those experts do see a broadening in the scope of DEI, with less of a direct focus on a specific identity or even the term “DEI” and a growing divide in levels of corporate commitment. Responsibilities once held by a chief diversity officer, a position companies rushed to fill after the 2020 murder of George Floyd, could get carved up among multiple departments, they say.
Abenaa Hayes, the founder and chief executive of Elysee Consulting, a firm focused on workplace equity, predicted there would be “changes in nomenclature, versus a pullback in doing the work.”
“You’re going to see a lot of people talking about programs and strategies that are geared toward employee engagement,” she said. “You’re going to start seeing people talk about cultivating culture within a company.”
But a more diffuse version of DEI raises questions about who takes ownership of what in a company’s diversity plans — and risks further diluting and undermining work that was already under-resourced by employers, consultants say.
Companies say they still care about DEI, even as they cut back
Companies are saying they still care about diversity, with a Conference Board survey of nearly 200 human-resources officers finding that none of them “plan to scale back DEI initiatives, programs and policies.” It also found that 63% plan to “focus on attracting a more diverse workforce.”
But DEI-related hiring has slowed. In January, there were 272 DEI job postings in the U.S. for every one million postings overall on Indeed, according to data provided to MarketWatch by the job-search site. That was down from 323 postings a year earlier and from the peak of nearly 500 in 2021.
J.P. Gownder, an analyst at the market-research firm Forrester, predicted in October that the percentage of companies that invest in a DEI function with a strategy and personnel behind it would fall to 20% by the end of this year, from 27% in 2023.
“As a result, too many companies will default to ‘check the box’ efforts such as heritage days, leading to performative — rather than substantive — DEI programs,” he wrote.
But even as some companies pull back, others are pushing forward and giving their chief diversity officers more say in product development and other strategies, said JT Saunders, the chief diversity officer at the corporate consulting firm Korn Ferry
KFY,
A sharper dichotomy is emerging between companies that have spent more time on their diversity goals and those that started only recently, he added.
“With organizations that have been at this journey for quite some time, we’re not seeing a lot of difference, because it’s embedded in their strategy,” he said.
Companies tend to roll out commemorative ads or highlight their investments in Black- or women-owned businesses during Black History Month in February and Women’s History Month, which includes International Women’s Day, in March. But such increases in spending come alongside cuts to DEI programs at companies like Zoom Video Communications Inc., as first reported last month by Bloomberg. CNBC reported that Meta Platforms Inc. and Google parent Alphabet Inc. also scaled back their DEI pushes last year.
When reached for comment, Meta
META,
and Google
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GOOG,
said last year’s cuts were companywide. They, along with Zoom
ZM,
said they were committed to DEI. Google noted new investments last year, including a fund to help women entrepreneurs and financial support for historically Black colleges and universities.
In a memo seen by MarketWatch, Zoom Chief Operating Officer Aparna Bawa said the company needed to change the way it approached DEI, and said it planned to partner with DEI firms that work with tech companies and to embed its values “directly into our people programs rather than as a separate initiative after the fact.”
Those cutbacks have come amid a broader battle over what role businesses should play in fighting inequality. Public outrage from multiple angles has cost some companies sales. And corporations, increasingly pressured from within and outside their ranks to weigh in on politics or social injustice, have found the usual PR equivocations no longer work.
From the archives (August 2023): Brands like Bud Light and Target have always tried to embrace social causes. Here’s why they just can’t win.
Affirmative-action ruling fuels attacks on corporate DEI
Meanwhile, efforts to dismantle DEI in the corporate world are playing out in court more frequently.
When the Supreme Court in June gutted race-conscious admissions policies in higher education, some corporate chief diversity officers initially believed the impact of the ruling would end at college education, said Kenji Yoshino, a New York University constitutional-law professor. But he noted that Chief Justice John Roberts wrote in the ruling’s majority opinion that “eliminating racial discrimination means eliminating all of it,” and he said he has had to tell those chief diversity officers that change is likely coming.
“It’s been my sad task to say the optimists about DEI here are wrong,” Yoshino said. “The Supreme Court gave us a really clear window into how it was thinking about equality and discrimination, and you need to worry about this.”
Even before that ruling, Comcast Corp. in 2022 settled a lawsuit that alleged a small-business-support program run by the telecom giant excluded white male business owners. Earlier that year, America First Legal, a group run by former Donald Trump aide Stephen Miller, filed a lawsuit against Amazon.com Inc. over a grant program aimed at helping Black, Latino and Native American entrepreneurs start package-delivery businesses that partner with the online retailer. Amazon
AMZN,
declined to comment. Comcast
CMCSA,
did not respond to a request for comment.
Not every legal attack since the Supreme Court’s ruling has been successful: In August, a lawsuit from an investor alleging that Starbucks Corp.’s
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hiring goals for people of color constituted discrimination was dismissed as frivolous.
America First Legal has also sued Target Corp.
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alleging the company wasn’t sufficiently looking out for investors’ interests when anti-LGBTQ+ boycotts over its Pride-themed merchandise ate into sales. Target did not respond to a request for comment. The group has taken aim at other companies as well, including IBM
IBM,
and Walt Disney Co.
DIS,
Meanwhile, the accounting firm PwC, following pressure from that group, allowed white students to apply for scholarships initially intended to make its workforce more diverse, the Financial Times noted in January.
“We’ve also reflected on the Supreme Court ruling and applied rigor to advance our diversity commitment in a way that fully accords with the changing legal landscape,” the company said in its latest purpose and inclusion report.
How DEI ended up on the chopping block — and how it might evolve
Efforts to undo workplace diversity initiatives existed long before the corporate world’s rush to embrace DEI in 2020. Depending on whom you ask, the roots of those efforts lie in generations-old bigotry, decades-old grievances about reverse discrimination or longstanding tensions between corporate profit and social responsibility.
After Floyd’s murder, companies raced to say — whether genuinely or performatively — that combating inequality mattered. They published statements. They inundated DEI consultants with phone calls. They hired chief diversity officers.
But those new DEI roles often weren’t set up to be effective, consultants say. The budgets, resources and authority to make hires and influence other decisions weren’t there. Neither was the training or experience, at times, for the people who moved into those newly created roles, they said. Company leaders often lacked a specific vision for what they actually wanted to do to stamp out workplace discrimination.
So by the time 2022 and 2023 rolled around — amid the anti-DEI attacks and investor agitations for stronger profits — companies that didn’t know what they wanted in the first place often targeted DEI-related departments for layoffs and cost cuts, experts say.
“When you don’t build inclusion into the business, and you don’t have metrics, it’s very easy to cut it and say that it didn’t work,” Mallick said.
From the archives (April 2023): Three years after companies doubled down on DEI, ‘the pendulum swings back.’ Here’s why.
Mallick said that against that backdrop, some companies could divide up their DEI duties and hand them off to other departments. A chief diversity officer role, for instance, could be turned into the chief communications and inclusion officer, or chief marketing and inclusion officer, or a chief supply-chain and inclusion officer.
Those roles could drive home diversity in different ways, she wrote in Fast Company in October — by guiding company leaders on how and when to speak with employees on bigger issues, marketing to a broader array of consumers and marginalized populations, and doing business with companies that have a more diverse workforce.
Others have proposed a more holistic framework for approaching DEI that centers on employee welfare. Laura Morgan Roberts, an associate professor of business administration at the University of Virginia, wrote in a Harvard Business Review article that “to bring advocates and critics of this work together, leaders must orient around a broader goal: creating the conditions for all workers to flourish.”
Those conditions, she said, should allow employees to be not just themselves but the best version of themselves, via anti-discrimination training and more concerted, constructive feedback. She said they also need the freedom to fail and the freedom to step back from pressure to perform at maximum productivity. Hybrid work and a more diverse workforce, which she said would help people in marginalized groups “blend in to escape scrutiny,” could make achieving the latter easier. But those freedoms often don’t filter down to women, people of color, people with disabilities and LBGTQ+ people, she added.
But as DEI practitioners try to rethink their jobs, they worry that a less direct approach risks sacrificing focus and accountability.
“The one thing that can be lost is the one thing that everyone’s talked about, which is the level of authority and prominence that DEI has in an organization,” Hayes said.
Companies “need a person who owns it, who’s responsible for it,” said Y-Vonne Hutchinson, the founder of the DEI consulting firm ReadySet. “Anytime we go into an organization as ReadySet, and there’s no one person responsible or accountable for these things, they lose momentum.”
DEI work overall needs to be reimagined, Hutchinson said. But she also said that while executives have often dismissed DEI as a feel-good function, it is in fact a discipline backed by research on how workplace dynamics differ depending on a person’s identity and what types of interventions work.
“I have yet to meet a traditional marketer that is going to write the right statement for the Israel-Palestine conflict,” she said. “Like, good luck.”
Demand for DEI has also endured in areas where the climate for it has been harsh. Hutchinson said that she still gets requests to do work in Texas, which has outlawed DEI work in its public colleges. Companies still don’t know how to talk to Gen Z, a generation likelier to look for more than just gestures toward diversity, she said.
She added that increasingly, people are unable to work with one another over political issues — be it over the Israel-Hamas war or this year’s presidential election — and politics still affect co-workers’ lives even if managers would prefer they keep it out of the workplace. A turn away from DEI risks also being a turn away from the people who might be able to handle those disputes, she said.
That turn could also force DEI opponents, many of whom have said the workplace should be a “colorblind” meritocracy, to say what specific alternatives they actually want in its place, she said.
“Meritocracy never existed in this country,” Hutchinson said. “DEI was created to address some really deep-seated biases and wrongs that exist in organizations. If you get rid of it, those biases still exist, and DEI opponents have no solutions for it.”
‘Let’s talk about the things we can do on purpose’
Workplace programs that explicitly use race or another protected classification to focus on one group of people — say, fellowships designated for people of color — are in the biggest legal jeopardy, Yoshino said. Putting staff through unconscious-bias training before they make hiring decisions, however, is likely still on solid legal ground.
Corporate retreats open only to women or people of color, he said, could be vulnerable to a reverse-discrimination suit. But opening up such gatherings to the broader workforce comes with its own compromises — including the loss of “that safe space that used to exist in those retreats,” he said.
“You lose the sense of psychological safety,” he said, “because everyone here is a person of color, and we can talk about concerns that we have as people of color without worrying that other people are listening who don’t have our life experience or shared demographic characteristics.”
Companies can still create programs that advance “socioeconomic diversity,” since socioeconomic class isn’t protected by anti-discrimination laws, Yoshino said in a recent Harvard Business Review article co-authored with David Glasgow, an adjunct law professor at New York University. Taking some steps to foster a deeper sense of employee belonging overall without crimping opportunity — such as establishing all-gender bathrooms and nursing rooms, widening college outreach to draw from a more diverse talent pool and supporting organizations committed to DEI — would serve as a “safe harbor” to current legal attacks, the authors added.
Some also say the changes could help create a deeper sense of shared responsibility in making companies more inclusive. Yoshino told MarketWatch he still sees ways to make DEI work, even with potentially greater legal constraints.
An anti-DEI lawsuit, he said, could bring chief diversity officers and chief executive officers together, jolting leaders into paying more attention to a company’s DEI plans. Opening up programs to a broader audience could help ease anxieties, namely among white men, that DEI initiatives are stacked against them. A bigger audience also means more people, he said — including potential allies who might have less fear of retaliation from their bosses and might empathize with and advocate for marginalized groups.
LaToya Rose, the senior vice president of diversity, equity and inclusion at the publisher Macmillan, suggested that companies could learn from what their peers are already doing well and reconsider certain tropes of DEI, like unconscious-bias training.
“Maybe that’s not the conversation, and it’s about what are we consciously doing,” she said. “Is there conscious inclusion? Let’s not talk about what we do unconsciously. Let’s talk about the things we can do on purpose.”
