new York
CNN
—

Walmart, the largest private employer in the United States, will limit some diversity, equity and inclusion (DEI) efforts. It is the latest company to backtrack on diversity initiatives amid pressure from the right, and its decisions will reverberate throughout the American economy.

The company announced Monday that it is ending racial equity training programs for its employees and is evaluating programs to increase supplier diversity. Walmart has worked in recent years to increase the number of suppliers that are at least 51% owned or operated by a woman, minority, veteran or LGBTQ person.

The company also reviews all funding for Pride and other events and monitors its online marketplace to remove sex or transgender products marketed to children. Walmart also said it would not renew its Center for Racial Equity, a five-year, $100 million philanthropic commitment the company made in 2020 to address the root causes of the gaps in African American outcomes in education, health, criminal justice and other areas.

DEI is typically a mix of employee training, resource networks, and recruiting practices to promote representation of people of different races, genders, class, and other backgrounds.

It’s not clear what impact Walmart’s moves will have on Walmart’s workforce of 1.6 million employees in the United States. According to the company’s most recent data, more than half of hourly employees and 42% of management are people of color. But the changes at Walmart are a sign that companies are increasingly pulling back and putting their diversity programs in the spotlight.

“We are ready to transform alongside our associates and customers who represent all of America,” Walmart said in a statement. “We have been on a journey and we know we are not perfect, but every decision comes from a desire to foster a sense of belonging.”

Activist Robby Starbuck, who has led a pressure campaign against companies for diversity programs, took credit for many of the changes and said he had contacted the company about its policies.

“This is the biggest victory for our movement yet,” Starbuck said on the social media platform X.

Starbuck, a former Hollywood music video director turned conservative activist, has launched online campaigns against major companies’ DEI programs and other progressive initiatives.

Walmart joins Harley-Davidson, Tractor Supply Co., John Deere and other companies in revising or rolling back their DEI programs, supporting Pride marches and LGBTQ events, strategies to slow climate change and other social actions.

Many companies have moved away from DEI in the last two years.

In 2020, DEI initiatives increased following a wave of racial justice protests following the police killing of George Floyd. Companies spent an estimated $7.5 billion on DEI-related efforts, such as employee resource groups, this year, according to a McKinsey study.

But some companies have recently withdrawn due to legal and political pressure.

Last year, Bud Light’s partnership with transgender influencer Dylan Mulvaney sparked an anti-trans backlash and a months-long boycott of the beer brand. The boycott and the company’s subsequent lukewarm response may have caused parent company Anheuser-Busch InBe to lose up to $1.4 billion in sales, according to the company.

In 2023, the Supreme Court ruled that colleges and universities cannot take race into account when granting admission, a landmark decision that overturned a longstanding precedent that benefited Black and Latino students in higher education. Since then, conservative legal groups have filed lawsuits against companies’ diversity initiatives, and many companies have begun making changes following the ruling.

Donald Trump’s election victory is likely to accelerate many companies’ move away from formal DEI programs, experts say.

“The DEI infrastructure in most companies was already poor before Trump,” said Shaun Harper, a professor of education and business at the University of Southern California and founder and executive director of the Race and Equity Center, in an interview with CNN last week. “Trump’s election provides an easy way out for business leaders who never committed to it.”

Harper expects that DEI and chief diversity officer roles will continue to disappear in companies, employees will receive less diversity training, and the number of people of color and women in corporate leadership will decline.

However, companies that back away from their commitment to diversity could create conflict with their own employees and jeopardize talent retention strategies. According to a Boston Consulting Group study based on data from more than 27,000 employees in 16 countries, DEI initiatives have been proven to reduce employee turnover and increase employee motivation.

“Employees will insist and demand that employers do something,” Harper said. “These employers will be woefully underprepared to respond.”