Corporate Diversity Retreat: Citigroup and PepsiCo Scale Back DEI Initiatives
Executive Summary
Amidst scrutiny from the Biden administration and a Supreme Court ruling, Citigroup and PepsiCo have announced rollbacks of their diversity, equity, and inclusion (DEI) policies. These changes reflect a broader trend away from corporate-backed DEI programs in the wake of recent legal and political developments.
Citigroup Restructures DEI Team
CEO Jane Fraser announced that Citigroup will no longer require diverse hiring pools or maintain a dedicated DEI team. The existing "diversity, equity, and inclusion and talent management" team will now be known as "talent management and engagement." Fraser cited changing environmental conditions as the rationale for these adjustments.
PepsiCo Sunsets DEI Initiatives
PepsiCo CEO Ramon Laguarta revealed that the company will eliminate its dedicated DEI officer, discontinue workforce representation goals, and expand its supplier base. He emphasized that PepsiCo remains committed to hiring and promoting based on talent and will unveil a new "inclusion for growth" strategy.
Other Corporate Retreats from DEI
Citigroup and PepsiCo join a growing list of major corporations that have recently retreated from DEI initiatives, including Meta, Walmart, McDonald's, Ford, and Target. These changes follow a 2023 Supreme Court ruling against race-conscious admissions and an executive order from former President Trump ending federal DEI programs.
Legal and Political Impact
The Supreme Court ruling in Students for Fair Admissions v. President and Fellows of Harvard College prohibited race-conscious admissions at Harvard and the University of North Carolina. Additionally, former President Trump's executive order aimed to combat "illegal private sector DEI actions." These legal and political developments have influenced the corporate landscape and led to a shift away from DEI programs.
Changes at Goldman Sachs and JPMorgan Chase
Goldman Sachs has dropped a requirement for its IPO clients to include women and minorities on their board of directors. JPMorgan Chase has significantly reduced mentions of "diversity, equity, and inclusion" in its annual report, citing legal changes and a desire to minimize bureaucracy. CEO Jamie Dimon has expressed skepticism about bias training and questioned the effectiveness of certain DEI programs.
Conclusion
The retreat from DEI programs by Citigroup, PepsiCo, and other major corporations is a significant development in the evolving legal and political landscape. These changes indicate a shift away from race-conscious hiring and promotion practices, as well as a focus on talent-based hiring and more inclusive workplace cultures.