DEI Consultants Worry Their Companies May Not Survive the Coming Downturn in Business

President Trump’s executive actions aren’t limited to closing DEI offices in the federal government. As we’ve pointed out previously, his administration is also taking aim at corporate DEI.

Several legal experts who advise companies and institutions regarding their DEI policies told ABC News that while the Trump administration doesn’t have the legal authority to mandate that private businesses abandon their DEI policies, the executive order’s language uses the threat of potential legal action against certain companies with DEI policies to ostensibly force them to do so…

“It’s a powerful threat that companies are responding to it by taking another very close look at their programs to make sure that they are comfortable with them,” said labor attorney Jason Schwartz, a partner and co-chair of the Labor and Employment Practice at Gibson Dunn in Washington, D.C., and who leads the firm’s DEI task force.

But in addition to all of the in-house corporate DEI folks who may be getting fired or rebranded soon, there are also lots of outside contractors who provide their DEI expertise for a fee. Those companies are facing a likely downturn in business as the corporations that hire them have second thoughts. Twin Cities Business spoke to a DEI trainer who was making the case for why companies should continue to hire her.

“If we stop this work, it will set us back,” said Seena Hodges, founder and CEO of The Woke Coach, which has consulted with several Fortune 500s on DEI matters. “All the progress will be erased and then some. Employees will see it, and consumers will also see it. Both groups are going to make the choices that work best for them, and if your company is not actively engaged, people are going to know it.”

Among her clients, many of which are smaller organizations that are often less scrutinized than a Fortune 50 like Target, Hodges said most are watching and waiting before making any changes. “The work might take a different shape,” Hodges said. “But even if you shift the language, think about the overall health of your organization—your workforce, your affiliates. We need to continue to do this work.”

And in the Bay Area, corporate DEI trainers are also expecting a downturn in business. Sangita Kumar who runs a business called Be the Change Consulting expect it to be bad.

“We’re bracing for a dramatic shrinkage in our DEI portfolio,” she said.

Other similar companies are shutting down temporarily or in hiding.

“Our team is taking time off right now to cope with the chaos of how things are unfolding,” said Alex Suggs, cofounder of the consultancy Different DEI, via email. Another diversity-focused startup founder refused to speak on the record in case “our business is deemed illegal” or could be targeted by lawsuits. 

“Everybody’s trying to be cautious — the main thing right now is just trying to wade through a lot of the confusion that’s out here,” said Bo Young Lee, president of the nonprofit AnitaB and former chief DEI officer at Uber. 

One DEI consultant quoted in the story, Eugene Dilan, thinks the downturn could turn out to be positive for the industry as a whole by weeding out “performative” efforts that don’t accomplish much. “It’s causing a lot of reflection for people, which could be good in terms of reevaluating the approach,” she said.

But my favorite response is the one I expect most DEI advocates to take. “I’m a believer that good people break bad laws.” one DEI consultant said. That is what many universities and some corporations have likely been doing all along. It’s illegal to hire people (or not hire them) on the basis or race. How many of these companies have been doing it anyway at the urging of professional trainers and true believers? We won’t know until someone investigates. Hopefully the Trump DOJ will take up that role.