For much of the 21st century, diversity, equity, and inclusion (DEI) became more than just corporate buzzwords—they evolved into pillars of corporate strategy. From Wall Street to Silicon Valley, Fortune 500 companies across the U.S. and Europe embraced DEI as an essential part of their workplace ethos. But in recent years, the landscape has changed dramatically. What once seemed like an irreversible trend is now under siege, with companies rolling back their initiatives, rebranding their efforts, or abandoning them altogether.
The Post-2020 DEI Boom
The modern DEI movement gained significant momentum after the death of George Floyd in 2020, an event that triggered widespread protests and corporate reckoning. Companies rushed to announce sweeping initiatives, vowing to address racial and gender disparities in hiring, promotions, and corporate leadership. McKinsey & Company published research linking workplace diversity to higher profits, and executives used these findings to justify aggressive DEI policies. In boardrooms and HR departments, terms like “unconscious bias training” and “inclusive hiring goals” became standard. Pronouns appeared in email signatures, and corporate social responsibility reports prominently featured DEI metrics.
In the U.S., the federal government played a key role in normalizing these initiatives. Under the Biden administration, agencies allocated millions to DEI training and workforce diversity programs. The Department of Health and Human Services, for example, awarded over $12 million in DEI-related contracts since 2020. Meanwhile, in Europe, companies faced regulatory pressure to diversify leadership. The European Union introduced gender quotas for corporate boards, requiring publicly traded companies to ensure at least 40% of board members were women by 2026.
The Business Case for DEI
Corporate leaders often framed DEI as a business imperative rather than a moral crusade. They pointed to studies suggesting that diverse teams perform better and drive higher revenue growth. Asset management firms, including BlackRock, urged companies to prioritize ESG (environmental, social, and governance) initiatives, which frequently included DEI commitments. Even financial exchanges got involved—Nasdaq implemented a rule requiring companies to have at least one diverse board member or explain why they did not.
For a time, the pressure to adopt DEI policies seemed insurmountable. Companies that failed to take action risked public criticism, shareholder activism, or even employee revolts. Corporate diversity officers became prominent figures, some commanding seven-figure salaries as they oversaw sweeping changes in hiring, promotion, and workplace culture. DEI was no longer an optional initiative—it was part of the brand identity of the modern corporation.
Early Signs of Resistance
Despite the rapid adoption of DEI policies, cracks began to form even before the recent political backlash. Internally, many employees and executives expressed skepticism about the effectiveness of mandatory bias training or race-based hiring targets. Some HR departments reported frustration over DEI’s ambiguous goals and unclear impact. Meanwhile, public skepticism grew as high-profile diversity programs faced legal challenges. Lawsuits alleging reverse discrimination began to emerge, particularly against companies that implemented race- or gender-based hiring quotas.
By 2022, some firms had already started to quietly scale back their DEI efforts. Companies that once prominently displayed their commitments to racial and gender equity on corporate websites began using softer language. Some replaced DEI job titles with terms like “People & Culture” or “Inclusion Strategy.” Others stopped publicly reporting workforce diversity statistics, recognizing that such transparency invited scrutiny from both sides of the political spectrum.
The early 2020s marked the high point of DEI’s corporate influence, but the tide has since shifted. As political and legal pressures mount, many companies are reconsidering their stance. What began as an earnest—if sometimes heavy-handed—effort to create fairer workplaces has now become a liability. The next part of this series will examine how opposition to DEI gained traction and why the movement became one of the most polarizing issues in corporate America.