Corporate DEI Under Fire: How Companies Are Responding to Trump's Executive Order

January 27, 2025•5 min read

The landscape of Diversity, Equity, and Inclusion (DEI) in corporate America is undergoing significant changes following recent executive actions by President Donald Trump.

On January 21, 2025, President Trump issued an executive order titled "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," which seeks to eliminate DEI policies and programs across federal agencies and within private industries that do business with the federal government.

This directive has prompted varied responses from corporations, with some scaling back their DEI initiatives due to legal and political pressures, while others remain committed to fostering inclusive workplaces.

How Companies Are Responding to the Executive Order

Scaling Back DEI Programs

Target Corporation: Target announced on January 24, 2025, that it will end several of its DEI programs, including its Racial Equity Action and Change (REACH) initiatives, citing an evolving external landscape. (Them, 2025)
Meta Platforms, Inc.: Meta has also reduced its DEI initiatives, reflecting a broader trend among major corporations to reassess their diversity commitments in response to political and legal pressures. (Business Insider, 2025)

Companies Standing Firm on DEI

Costco Wholesale Corporation: Costco's shareholders recently overwhelmingly rejected a proposal to investigate the company's DEI policies, with 98% voting against it. This decision underscores Costco's commitment to its DEI initiatives despite external pressures. (Reuters, 2025)
JPMorgan Chase & Co.: CEO Jamie Dimon has strongly defended the company's DEI efforts, highlighting their importance to innovation and financial results. JPMorgan continues to uphold its diversity initiatives amidst the changing political landscape. (Business Insider, 2025)

Investor and Market Reactions

Wall Street’s Response: Investor sentiment is divided. Some shareholders urge companies to maintain DEI commitments, viewing them as essential to long-term growth, while others advocate for a neutral approach to avoid legal entanglements.
Consumer Sentiment Trends: Recent surveys indicate that 70% of Gen Z and Millennial consumers prefer to buy from companies that prioritize workplace diversity. (Business Insider, 2025)
Stock Performance and Risk: Companies that make abrupt changes to DEI policies risk reputational damage, employee disengagement, and stock fluctuations due to investor uncertainty.

Rebranding DEI Strategies Without Political Backlash

Some corporations are reframing their DEI efforts under different terminology:

Inclusive Leadership Development: Replacing “DEI training” with leadership-focused programs that highlight diverse perspectives without political connotations.
Workplace Culture and Innovation Programs: Shifting language toward “workplace culture enhancement” rather than explicit DEI branding.
Broadening Diversity Strategies: Expanding programs beyond race and gender to include economic diversity, skills-based hiring, and professional development for all employees.

Key Takeaway: Simply renaming initiatives isn’t enough. Employees, job seekers, and investors demand measurable impact rather than performative rebranding efforts.

Challenges in Employee Engagement and Retention

Internal morale is emerging as a significant concern as companies alter their DEI strategies:

Employee Pushback: Workforces previously engaged in DEI programs are expressing frustration over abrupt changes, leading to lower morale and potential retention issues.
Recruitment Challenges: Companies that cut diversity hiring programs may struggle to attract top talent, as job seekers increasingly prioritize inclusive workplaces, as 70% of Gen Z & Millennials prefer inclusive workplaces ([Business Insider, 2025])..
Trust and Transparency: Business leaders must carefully communicate policy changes to avoid eroding trust within their organizations.

The Future of Corporate DEI: What Happens Next?

The corporate response to Trump’s executive order is more than just a policy shift.

It’s a turning point for businesses, employees, and job seekers.

Some companies are stepping away from DEI due to legal and political pressures, while others are reinforcing their commitment to inclusion, recognizing that workplace diversity isn’t just about compliance. it’s about business growth, innovation, and long-term success.

What does this mean for you? Whether you're an employer navigating new challenges or a job seeker looking for an inclusive workplace, now is the time to take action.

How to Move Forward: Action Steps for Employers & Job Seekers

For Employers

Assess Your DEI Strategy: Conduct a legal compliance review to ensure policies align with emerging regulations.
Measure DEI Impact: Instead of performative branding, link DEI efforts to business performance, innovation, and workforce retention.
Communicate Clearly: Transparency is key—whether scaling back or reinforcing DEI, ensure employees and stakeholders understand why.
Retain & Attract Top Talent: With Gen Z and Millennial job seekers prioritizing diverse workplaces, cutting DEI may cost you more in recruitment struggles.

For Job seekers

Research Companies’ DEI Policies: Actions speak louder than words—look at their track record, leadership representation, and employee reviews.
Ask the Right Questions: During interviews, inquire about diversity efforts, mentorship programs, and company culture.
Network in DEI-Friendly Spaces: Connect with professionals in industries and companies that align with your values.

Where Do You Stand?

Employers: Curious about how your company measures up in DEI? Take our DEI Survey and gain industry insights.

Job Seekers: Looking for a company that doesn’t just talk about diversity but actually commits to it? Browse DEI-friendly employers hiring now.

At Diversity.com, We are committed to supporting both employers and job seekers in fostering equitable and inclusive workplaces.

If you have any questions or need assistance, feel free to Contact Us Here. Our dedicated support team is ready to help!