Formal DEI programs may be dead—but diversity is more important than ever

DEI is caught in the crossfire of today’s contentious social and political landscape, nearly obliterated over the past two years amid mounting pushbacks. Once a cornerstone of corporate strategy, these initiatives have faced significant backlash, resulting in quiet cuts, funding redirections, and rebranding attempts. In many cases, DEI is being diluted and hidden behind new names.

Call it what you will—belonging, cultural inclusion—a rose by any other name; enterprise leaders must understand that the principles of DEI are essential for modern organizations to thrive in increasingly diverse markets.

Tech giants that once championed DEI with million-dollar programs are leading the retreat through budget cuts and department closures

DEI once held a strong position in corporate strategy, viewed as essential for fostering a fair and innovative workplace. Tech giants led the charge, with Google, Meta, and Zoom investing heavily in dedicated programs and teams to drive measurable business impact through diversity initiatives. However, the story of corporate DEI reads like a cautionary tale of good intentions meeting ineffective execution. While well-funded and well-intentioned, these programs treated diversity as a siloed initiative.

Fast-forward to 2024, and this surface-level corporate commitment is unraveling. The US Supreme Court’s decision to dismantle affirmative action provided the perfect cover—if diversity programs suggest inequality, the logic went, eliminating them creates equality. This reasoning, combined with mounting economic pressures and a slew of anti-DEI legislation, triggered a domino effect of corporate retreat. High-profile cuts at Boeing, Google, Zoom, and John Deere signal a broader retreat, with diversity work either deprioritized or reduced to basic compliance.

As organizations abandon DEI, the underlying disparities programs were meant to address remain intact—particularly at the leadership level

Leadership positions across major corporations continue to be predominantly held by white men—particularly at the executive and board levels. At the same time, systemic barriers manifest in persistent wage gaps and uneven promotion rates.

The corporate hierarchy reveals a clear pattern of exclusion: Let’s take, for instance, that women, despite comprising half the US population (50.5%) and maintaining strong workforce representation, face a systematic drop-off at each leadership tier.

Exhibit 1: As women climb the corporate ladder, their numbers steadily drop

Source: US Bureau of Labor Statistics, 2023

This number shrinks even further at Fortune 500 companies. While women occupy 10.2% of CEO positions across all Fortune 500 companies, the broader picture of representation through organizational levels is more challenging to track. In a sample of Fortune 500 companies that still report these figures, women comprise 37% of total employees, declining to 31% in management and dropping to 27% in senior leadership. Notably, many organizations have discontinued reporting these metrics since 2022 – in other words, if it doesn’t look that great when companies share data, imagine what it looks like when they don’t.

Exhibit 2: At Fortune 500 companies, women’s numbers thin further

Sample: 10 Fortune 500, *data out of all Fortune 500 companies
Source: HFS Research, 2024

The tech services industry, too, which positions itself as a driver of transformation and innovation, reveals similar disparities. While these firms craft narratives about digital transformation and future-ready workforces, their own leadership demographics tell a different story (see Exhibit 3).

Exhibit 3: Representation of women across large service providers

Sample: data compiled from leading technology and consulting firms, including Accenture, Capgemini, Cognizant, Deloitte, EXL, Genpact, IBM, Infosys, KPMG, TCS, Tech Mahindra, and Wipro.
Source: HFS Research, 2024

These gender statistics represent just one dimension of workplace disparities. The data becomes even more concerning when examining representation across race, ethnicity, disability status, and their intersections. For employees who hold multiple underrepresented identities, such as women of color, the drop-offs are even more severe.

Every homogeneous promotion cycle builds another wall and adds to the talent debt

In today’s high-stakes talent market, the compounding effect of homogeneous leadership decisions creates a multiplier effect. Each time a leadership team promotes someone who looks, thinks, and acts just like them, they’re not just filling another position—they’re actively constructing barriers that will take years, if not decades, to dismantle. These decisions create a self-reinforcing cycle where power, influence, and decision-making authority become increasingly concentrated in the hands of a demographically identical group.

The real danger of “mirror-image” promotions is they create tomorrow’s leadership problems today. Each senior hire that favors familiarity over diverse capability adds resistance to change, deters future diverse talent, and drives high-potential candidates elsewhere. These decisions create a talent debt that compounds every promotion cycle, making it increasingly difficult to build genuinely inclusive organizations.

Rather than viewing DEI’s retreat as a step backward, organizations can seize this moment to integrate its most valuable elements into their operations

While many organizations are quietly stepping back from formal DEI programs—this retreat paradoxically creates an opportunity for more authentic integration of inclusive practices into core business operations. Here’s how:

• Embed inclusive practices directly into core business processes rather than treating them as separate initiatives.
• Transform hiring and promotion systems to systematically address bias rather than relying on one-off training programs.
• Make diverse leadership a core performance metric rather than a separate
  “DEI goal.”
• Build inclusive practices into product development and innovation processes to better serve diverse markets.
• Integrate diversity metrics into standard business reporting rather than creating separate DEI scorecards.
• Develop leadership capabilities that emphasize inclusive decision-making as a fundamental management skill.

The key is moving from superficial programs to fundamental operational transformation, where inclusive practices become inseparable from how organizations operate and compete.

The Bottom Line: Retreating from DEI programs doesn’t eliminate the business necessity of inclusive practices—it just heightens the urgency of embedding them into core operations rather than treating them as separate initiatives.

While the language and approach to diversity may evolve, the fundamental business imperatives remain: understanding and reflecting your market, attracting and retaining top talent across demographics, and maintaining early warning systems for potential systemic issues that could create long-term strategic vulnerabilities.

The challenge isn’t whether to maintain these principles but how to integrate them more effectively into core business operations while moving beyond the limitations of first-generation DEI programs.