DEI backlash grows as Congress, Walmart scale back efforts
The next Congress is almost certain to approve legislation banning diversity, equity and inclusion programs. Some businesses, such as Walmart, are also pulling back on DEI.
Congress and President-elect Donald Trump plan to purge all federal diversity, equity and inclusion initiatives from the government. Employees involved in federal DEI programs might face termination, and companies that provide goods and services to the government could also be affected.
The Republican-led Dismantle DEI Act of 2024 will eliminate federal funding and support for DEI initiatives, training and offices within government agencies and federal contracting. In the Senate, Vice President-elect JD Vance is sponsoring the bill, while in the House, the lead sponsor is Rep. Michael Cloud (R-Texas).
The DEI bill also prohibits federal contractors from using federal funds for DEI programs. While the Dismantle DEI Act is unlikely to pass in the current Congress, Republicans will control both chambers starting in January.
This backlash might already be influencing corporate support for DEI efforts. Walmart, for example, is ending its data-sharing agreement with the Human Rights Campaign, which assigns businesses scores based on their LGBTQ+ policies.
The company is also discontinuing support for its Center for Racial Equity, which Walmart launched in 2020 following the murder of George Floyd. At that time, Walmart CEO Doug McMillon stated that America's history of "slavery, lynching, the concept of separate but equal and the other realities from our past have morphed into a set of systems today that are all too often, unjust."
Walmart has not commented directly on its recent changes. However, in a statement released Tuesday, the company said, in part: "We've been on a journey and know we aren't perfect, but every decision comes from a place of wanting to foster a sense of belonging, to open doors to opportunities for all our associates, customers and suppliers and to be a Walmart for everyone."
According to its published data, Walmart has a highly diverse workforce and a top score from the Human Rights Campaign.
DEI backlash shortsighted
Samantha Karlin, founder and CEO of Empower Global, a leadership training firm, criticized Walmart's rollback of its DEI programs as "shortsighted."
Walmart's rollback is pure political reaction and shows that their commitment to DEI was more about PR than actual values.
Samantha KarlinFounder and CEO, Empower Global
"DEI is extremely broad," she said. According to Karlin, inclusion helps people understand others' lived experiences and realize that not everyone's experience matches theirs. Equality includes training people to avoid bias in hiring and ensuring employees are paid equitably. Then there's supplier diversity --"which literally just helps small businesses like mine," she said.
"Walmart's rollback is pure political reaction and shows that their commitment to DEI was more about PR than actual values," Karlin said.
Karlin emphasized that DEI is not about unfairly prioritizing candidates or suppliers, but about creating opportunities and fostering empathy among employees -- something research has shown can improve organizational performance.
Consulting firm McKinsey & Co. has credited DEI efforts with improving profitability and has said diverse companies have an edge in recruiting top talent. Researchers have also linked bias in artificial intelligence software to development teams that lack demographic representation.
According to Jim Gottshall, president of Belong Group, a consulting firm specializing in DEI and belonging training, Walmart's decision to scale back its DEI initiatives reflects a broader frustration with traditional approaches.
Gottshall said traditional DEI strategies often alienate leaders and fail to encourage true collaboration. He advocates for integrating "cultural intelligence," which equips leaders with skills to navigate cultural differences. "This approach motivates buy-in by focusing on growth, not guilt," he said.
Walmart's decision to scale back DEI also comes with risks, Gottshall noted. "It could alienate employees and consumers who increasingly value inclusion," he said.
Patrick Thibodeau is an editor at large for TechTarget Editorial who covers HCM and ERP technologies. He's worked for more than two decades as an enterprise IT reporter.
