Within his first two days of taking office, President Donald Trump took significant steps to dismantle diversity, equity, and inclusion (DEI) programs through a series of executive orders (EOs).
On January 20, 2025, he issued the EO titled “Ending Radical and Wasteful Government DEI Programs and Preferencing,” which eliminated all DEI programs across the federal government. This order also abolished “Chief Diversity Officer” positions and terminated equity-related grants and contracts. The following day, January 21, 2025, President Trump signed another EO, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which revoked the previous administration’s executive orders that had promoted DEI, affirmative action, and equal opportunity programs. Additionally, it removed DEI requirements from federal contracting and mandated that contractors certify they do not operate any DEI programs that violate federal anti-discrimination laws.
As part of these policy changes, the Trump administration directed the Equal Employment Opportunity Commission (EEOC) to review company practices, including those of law firms, to ensure compliance with federal anti-discrimination laws. This includes prohibiting race-based quotas and discriminatory decisions regarding promotions, client access, and other professional opportunities. Federal contractors are now required to certify that they do not operate DEI programs that violate federal regulations.
The combined impact of these executive orders extends beyond the federal government to private companies engaged in government contracts. Any company that provides services to the government, even if only a small fraction of its business is federally affiliated, must comply with the new directives. Within sixty days of the issuance of the EOs, companies employing federal contractors must eliminate DEI-related offices and positions, terminate equity-related action plans, programs, and contracts, remove DEI-related performance requirements, and submit certifications ensuring compliance with the new rules. Companies that fail to comply with these regulations could face significant legal consequences, including potential liability under the False Claims Act (FCA).
Many companies are reassessing or rolling back DEI initiatives to ensure compliance with federal guidelines. Some firms have rebranded their diversity programs under different terminologies to maintain inclusivity without explicitly referencing DEI. For example, Victoria’s Secret renamed its “Diversity, Equity, and Inclusion” team to “Inclusion and Belonging,” while McDonald’s rebranded its DEI team as the “Global Inclusion Team.” This trend reflects a broader corporate strategy to adapt to legal and policy changes while continuing to foster an inclusive work environment.
The administration’s actions have led to tangible shifts in corporate DEI strategies. Pepsi, for example, has eliminated its DEI workforce representation goals for managerial roles and its supplier base. On February 11, 2025, Institutional Shareholder Services announced that it would no longer consider gender, racial, or ethnic diversity when making voting recommendations for U.S. company boards. Similarly, Major League Baseball (MLB) has removed references to “diversity” from its career homepage. The administration’s policies have also influenced the technology sector, where several companies have reevaluated their DEI commitments to align with the current political climate and legal requirements.
While some corporations are scaling back DEI initiatives, others remain committed to diversity in different forms. Starbucks CEO Brian Niccol has reaffirmed the company’s commitment to inclusivity,emphasizing that diversity strengthens the business. Additionally, corporate board diversity is evolving to prioritize “cognitive diversity,” which focuses on varied perspectives and industry experiences rather than demographic targets. This shift aims to foster innovation and improve decision-making processes within organizations.
Overall, the Trump administration’s policies have led to significant changes in corporate diversity initiatives, with many businesses adjusting their DEI strategies in response to new federal guidelines. As companies navigate these changes, they must balance compliance with anti-discrimination laws while addressing the broader benefits of maintaining diverse perspectives within their leadership and workforce.