One in five companies have eliminated their diversity, equity and inclusion (DEI) initiatives since 2024, sparking concern over inclusion and employee retention, reveals a new study.
Since President Trump’s reelection in November 2024, many US companies have scaled back or eliminated their DEI programmes. While some leaders welcome these changes, many others express concern over the consequences, highlighting a stark divide in how DEI cuts are perceived internally.
A recent survey by Resume.org, conducted in July 2025 with 965 business leaders, reveals the trends, impacts, and opinions surrounding DEI reductions across the corporate landscape. Key findings show that:
- 1 in 5 companies eliminated DEI programmes entirely since November 2024.
- 10% reduced their investment in DEI initiatives.
- 57% of companies that cut DEI report decreases in hiring underrepresented groups.
- 1 in 3 companies report promoting fewer underrepresented employees.
- Half report decreased morale, and 1 in 5 see increases in discrimination or bias incidents.
SHIFTS IN DEI BUDGET PRIORITIES
These findings highlight the wide-ranging impact of DEI programme reductions on company culture, hiring and employee retention.
Among companies that reduced or eliminated DEI initiatives, 74% cite political pressure as the main driver. Shifts in budget priorities and leadership focus were also cited. While 71% of companies that still have DEI programmes report no changes, some are considering cuts:
- 16% likely to eliminate DEI by the end of 2025
- 7% expect to do so within the next four years
Despite this trend, many leaders acknowledge DEI programs improve employee satisfaction and retention, indicating a conflict between external pressures and internal benefits.
CONCERNS OVER DEI CUTS
While some respondents view DEI programmes as counterproductive or performative, arguing that removing DEI restored fairness and reduced workplace tension, others expressed disappointment and concern about the long-term impact of DEI reductions. Additionally, employees feel that cutting DEI programmes reduces representation, morale and trust.
The survey data showed that companies eliminating DEI are disproportionately affecting underrepresented employees:
- 37% report fewer hires of women of colour
- 33% report fewer LGBTQIA+ hires
- 33% report fewer men of colour being hired
- 26% report fewer hires of people with disabilities
- 13% report fewer white women being hired
- Hiring white men is less affected, with only 12% reporting a decline
- Similarly, nearly 1 in 3 companies reported fewer promotions for underrepresented employees, with declines in leadership roles for people of colour (30%) and women (24%).
IMPACT ON MORALE, RETENTION & WORKPLACE CULTURE
The survey also found that DEI cuts are also harming workplace culture. For example,
- 47% reported decreased morale
- 39% reduced benefits tied to DEI programmes
- 36% report lower retention of diverse talent
- 35% see reduced attraction of underrepresented employees
- 25% report reputational damage
- 18% report increases in discrimination or bias-related incidents
“Slashing DEI programmes often leads to immediate declines in morale and retention, especially among underrepresented employees who no longer feel supported or valued,” explained Kara Dennison, head of career advising at Resume.org. “DEI fosters belonging and psychological safety, which are critical to employee engagement and loyalty.”
Dennison added that removing DEI can create long-term risks, including reputational harm, disengagement and a weakened talent pipeline.
BENEFITS & RISKS
Business leaders are clearly divided over DEI reductions. While some feel that removing programmes restores fairness and eliminates performative practices, others see the cuts as damaging morale, reducing diversity in hiring and promotions and harming company culture.
Companies navigating political pressures and budget constraints must weigh these trade-offs carefully. DEI is not just a programme, but a strategic investment in employee satisfaction, talent development and organisational resilience, concluded the report.
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