Walmart’s DEI rollback signals a profound shift in the wake of Trump’s victory
NEW YORK — Walmart’s sweeping rollback of its diversity policies is the strongest indication yet of a profound shift taking hold at U.S. companies that are re-evaluating the legal and political risks associated with bold programs to bolster historically underrepresented groups.
The changes announced by the world’s biggest retailer on Monday followed a string of legal victories by conservative groups that have filed an onslaught of lawsuits challenging corporate and federal programs aimed at elevating minority and women-owned businesses and employees.
The retreat from such programs crystalized with the election of former President Donald Trump, whose administration is certain to make dismantling diversity, equity and inclusion programs a priority. Trump’s incoming deputy chief of policy will be his former adviser Stephen Miller, who leads a group called America First Legal that has aggressively challenged corporate DEI policies.
“There has been a lot of reassessment of risk looking at programs that could be deemed to constitute reverse discrimination,” said Allan Schweyer, principal researcher at the Human Capital Center at the Conference Board.
“This is another domino to fall and it is a rather large domino,” he added.
Among other changes, Walmart said it will no longer give priority treatment to suppliers owned by women or minorities. The company also will not renew a five-year commitment for a racial equity center set up in 2020 after the police killing of George Floyd. And it pulled out of a prominent gay rights index.
Schweyer said the biggest trigger for companies making such changes is simply a reassessment of their legal risk exposure, which began after U.S. Supreme Court’s ruling in June 2023 that ended affirmative action in college admissions. Since then, conservative groups using similar arguments have secured court victories against various diversity programs, especially those that steer contracts to minority or women-owned businesses.
Most recently, the conservative Wisconsin Institute for Law & Liberty won a victory in a case against the U.S. Department of Transportation over its use of a program that gives priority to minority-owned businesses when it awards contracts.
Companies are seeing a big legal risk in continuing with DEI efforts, said Dan Lennington, a deputy counsel at the institute. His organization says it has identified more than 60 programs in the federal government that it considers discriminatory, he said.
“We have a legal landscape within the entire federal government, all three branches — the U.S. Supreme Court, the Congress and the President — are all now firmly pointed in the direction towards equality of individuals and individualized treatment of all Americans, instead of diversity, equity and inclusion treating people as members of racial groups,” Lennington said.
The Trump administration is also likely to take direct aim at DEI initiatives through executive orders and other policies that affect private companies, especially federal contractors.
“The impact of the election on DEI policies is huge. It can’t be overstated,” said Jason Schwartz, co-chair of the Labor & Employment Practice Group at law firm Gibson Dunn.
With Miller returning to the White House, rolling back DEI initiatives is likely to be a priority, Schwartz said.
“Companies are trying to strike the right balance to make clear they’ve got an inclusive workplace where everyone is welcome, and they want to get the best talent, while at the same time trying not to alienate various parts of their employees and customer base who might feel one way or the other. It’s a virtually impossible dilemma,” Schwartz said.
Marc Morial, CEO of the National Urban League, a civil rights group that has worked with Walmart on diversity and inclusion efforts in the past, called the company’s pullback from DEI “stunning” and “unexpected.”
“This is inconsistent with the Walmart I know,” said Morial, who argued that DEI policies are how organizations ensure compliance with federal anti-discrimination laws like the Civil Rights Act of 1964 and any suggestion of favoritism or preferential treatment “is really defamatory against what DEI represents.”
