In the months since Trump issued an executive order (EO) dismantling federal diversity, equity, and inclusion programs (DEI) within the federal government, ripple effects have landed in the private sector. First, Trump called upon the DOJ to look into “potential civil compliance investigations,” and Attorney General Pam Bondi released a memo on how the DOJ will “investigate, eliminate, and penalize illegal DEI” policies. Despite the EEOC issuing more guidance, a grey area still exists regarding the definition of “illegal” in the DEI realm.
This puts employers in a rough spot while the pendulum swings hard, especially for forward-facing companies, and Target is feeling it more than most after scaling back its DEI policies on hiring and training. Only a few years ago, the retailer was targeted by a boycott after selling Pride Month merchandise, and now? The results confirm a difficult climate to navigate.
Boycotts: Two high-profile retailers with similar shopping demographics are feeling very different effects. On one side, Target is in the midst of a 40-day boycott, the so-called “Target Fast,” which is being driven by customers voting with their wallets against the DEI rollback. Whereas at Costco, shareholders overwhelmingly voted to retain the company’s DEI efforts, and it sure looks like plenty of Target shoppers dropped their Red Cards and signed up for a Costco membership.
According to a Placer.ai report, Target suffered a serious drop in foot traffic throughout February and March. Surely, multiple factors contributed to this downswing, including decreasing consumer confidence during economic turmoil. However, it cannot be ignored that Target reportedly lost 9% and 6.5% of their foot traffic during these two months, year over year, while Costco saw their numbers increase by 2.2% and 7.5%.
Retail Brew now adds that Target experienced a tenth straight week in declining traffic, including through a recent Target Circle savings week. This outcome might feel particularly jarring after employers expect Trump to be friendlier towards businesses in terms of labor subjects. Yet a general sense of chaos is not helping companies while federal scrutiny also persists.
About Those Investigations: In cooperation with Pam Bondi’s DOJ, the EEOC is currently scrutinizing large law firms, and other federal agencies began civil compliance probes into the DEI efforts and hiring practices of at least 45 companies, including the Walt Disney Company.
Additionally, Trump used social media to pressure Apple to “get rid of DEI rules, not just make adjustments” after the tech giant’s shareholders overwhelmingly voted to retain DEI initiatives. Yet Apple is still standing firm, with CEO Tim Cook declaring, “We’ve never had quotas or targets for Apple. Our strength has always come from hiring the very best people and then providing a culture of collaboration.”
On Rebranding: Some companies aim to ward off scrutiny by switching up labels. Google has renamed its “chief diversity officer” to “vice president of Googler engagement,” and JP Morgan dropped the word “equity” in favor of “opportunity.” Whereas Constellation Brands, maker of Corona beer, rebranded their DEI team as an “inclusive culture team” while shifting focus from diversity in suppliers to supporting small businesses.
Takeaways: Employers are in an unenviable position, especially since a hard-swinging pendulum can eventually swing in the opposite direction. Some analysts also theorize that DEI could grow stronger by surviving a volatile legal landscape. As a result, employers would be wise to avoid sudden moves while reflecting upon hiring and training practices. In short, companies should prepare for scrutiny from the feds, clientele, or both.
