As DEI gets more divisive, companies are ditching their teams

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After George Floyd’s murder in 2020, companies made big pledges about racial equity, hiring teams dedicated to diversity, equity and inclusion. Now corporate America is pulling back — cutting DEI jobs and outsourcing the work to consultants.

DEI jobs peaked in early 2023 before falling 5 percent that year and shrinking by 8 percent so far in 2024, according to Revelio Labs data shared with The Washington Post. The attrition rate for DEI roles has been about double that of non-DEI jobs, says Revelio, which tracks workforce dynamics.

In recent weeks, Zoom axed its internal DEI team amid broader layoffs, and Snap cut workers who worked on retention and engagement efforts for employees from underrepresented groups. Meta, Tesla, DoorDash, Lyft, Home Depot, Wayfair and X were among major corporations making steep cuts in 2023, slashing the size of their DEI teams by 50 percent or more, Revelio’s data shows.

“The overall number of DEI officers has decreased,” said Lisa Simon, Revelio’s senior economist, “but it’s not enough to destroy all the strides that happened after 2020.”

DEI’s ‘Rooney Rule’ placed under legal microscope, on and off the field

At Zoom, chief operating officer Aparna Bawa told employees that the company would replace its internal DEI team with DEI consultants who would “champion inclusion by embedding our values … directly into our people programs rather than as a separate initiative,” according to a Jan. 29 memo seen by The Post.

Colleen Rodriguez, the company’s head of global corporate communications, said Zoom “remains committed” to DEI work.

Snap made a similar decision in February, according to reporting from Business Insider. Snap did not respond to a request for comment.

Corporate America’s retreat from DEI has coincided with increased legal risk and political animosity toward systemic efforts to boost racial equity. State legislators have introduced at least 65 anti-DEI bills since 2023, according to the Chronicle of Higher Education. The resignation of Claudine Gay, Harvard University’s first Black president, amid plagiarism allegations in January was billed as “the beginning of the end for DEI in America’s institutions” by the conservative activist who led the campaign to oust her. Mentions of DEI on corporate earnings calls have plunged in the past year, according to the Wall Street Journal.

For companies that were never really committed, “this is the perfect air cover for backing off diversity,” said Joelle Emerson, CEO of DEI consultancy Paradigm.

Not all companies downsizing teams are giving up on the work, Emerson said, noting that some employers overhired when they established their DEI teams.

“I don’t know that it ever made sense to have a 25-person diversity team sitting to the side of a core business function,” Emerson said. “Companies should be able to say, ‘We’ve tried this, it didn’t have an impact, we’re going to try something different.’”

2024 might be do-or-die for corporate diversity efforts. Here’s why.

The recalibration is happening under serious legal pressure. Last year, when the Supreme Court struck down affirmative action in college admissions, the decision didn’t apply directly to employers. But the ruling kicked off an effort, driven largely by conservative activists, to dismantle race-conscious policies in other domains of American life.

In July, 13 Republican attorneys general sent a letter urging Microsoft and other Fortune 100 companies to reexamine their DEI policies in response to the ruling. America First Legal, a group backed by former Trump adviser Stephen Miller, has filed legal complaints over diversity practices at scores of companies, including United Airlines, Kellogg’s, Nike, and organizations such as the FBI, National Football League and Major League Baseball.

Edward Blum, the conservative activist behind the lawsuits that toppled affirmative action in college admissions, is suing venture capital firm Fearless Fund over its grant program for early-stage businesses owned by Black women. Blum’s group has also found success targeting major law firms over their diversity fellowships: Three big law firms — Perkins Coie, Morrison Foerster and Winston & Strawn — opened their fellowships for students of color to applicants of all races and backgrounds after being sued. A fourth law firm, Adams and Reese, ended its diversity fellowship after receiving an Oct. 9 letter threatening litigation.

Even before the tide turned last summer, DEI work was an uphill battle. As companies’ commitments have wavered, DEI professionals have had their work challenged.

“Any time I’d raise something with the word ‘equity’ … I was told it scares people away,” said a former head of DEI for a gaming start-up, who was laid off in January. He spoke on the condition of anonymity to avoid violating his separation agreement.

After stepping into the role in 2020, he said he was disheartened by resistance from executives to pay-transparency policies and employee resource groups. The DEI budget kept facing cuts, he said, and he was constantly under pressure to show a “return on investment.”

When it comes to DEI, businesses are “interested until they’re not,” he said. “These positions are going away every day.”

When Reagan tried to undo affirmative action, corporations fought back

Some groups have been imploring companies to maintain their DEI focus. On Monday, the executive board of the Congressional Asian Pacific American Caucus sent a letter to CEOs of Fortune 100 companies, inquiring about efforts to improve Asian American diversity and encouraging them to stay the course amid growing attacks on DEI. The group noted that Asian Americans remain “severely underrepresented at the senior-most levels of the largest U.S. corporations.”

“Without executive leadership representation at Fortune 100 companies, AANHPI employees have fewer role models and fewer internal champions to guide and mentor them,” the letter reads. “Corporate leaders also have fewer internal resources to guide them in fully understanding the needs and aspirations of AANHPI consumers.”

Members of the Congressional Black Caucus sent a similar letter in December to acting labor secretary Julie Su, inquiring about tech layoffs that were disproportionately affecting Black workers.

“Tech companies who previously agreed to address bias and discrimination and create greater opportunities in the workforce are now quietly defunding diversity pledges,” the letter reads, according to TheGrio.

Some companies are bucking the trend. J.M. Smucker, Victoria’s Secret, Michaels, Moderna, Prudential and ConocoPhillips were among big corporations that expanded their DEI teams by 50 percent or more in 2023, according to Revelio’s data. Packaged-food giant Conagra Brands and NASA both doubled the size of their DEI teams.

With 30 years’ experience in diversity work, Cristina Jimenez, head of DEI at RHR International, a leadership consulting firm, says she has “watched the pendulum swing back and forth” between support and resistance. But this moment seems particularly fraught, she said. Her clients feel like “they’re in a battle zone all the time.”

“They’re not sure what to do next,” Jimenez said, “but they understand if they don’t do something, their talent strategies, their culture, their ability to succeed is all at risk.”

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