Walmart is the latest – but arguably the largest in employment terms – American corporate to roll back some or all of its DEI initiatives, as pressure mounted on corporate America from conservatives, emboldened by the impending Trump presidency, to end “wokeism” in American society.
In a sweeping reversal of stance, Walmart announced that it would no longer give preferential treatment to some suppliers based on race or gender.
The big box retailer has decided not to renew its five-year commitment to a racial equity centre established after a black man, George Floyd, was killed by a white police officer. It is also withdrawing from a prominent gay rights index. More tellingly, it also said that it will no longer sell chest binders or children’s books about transgenderism, a hot-button issue with conservatives.
Walmart is neither the first nor the only large US corporation to roll back affirmative action and DEI policies. Automakers Ford and Toyota, motorcycle manufacturer Harley Davidson, and retailer Lowe’s and Tractor Supply have all cut back or eliminated many of their DEI initiatives.
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The reason is not far to seek – fear of customer backlash, the very same fear of the “cancel culture” which liberal activists used to force the inclusion of such policies in the first place. Perhaps the most telling comment on the radically changed atmosphere in the US comes from the Walmart spokesperson’s explanation for why the company did what it did: “We are willing to change alongside our associates and customers who represent all of America,” the spokesperson said.
The actions of giant corporates like Walmart are bound to encourage others to follow. The question is whether such a movement will spread outside the US.
Ford CEO Jim Farley, in an internal e-mail to staff, which was leaked by anti-DEI campaigner Robby Starbuck (who also forced Walmart to change), said: “We are mindful that our employees and customers hold a wide range of beliefs,” adding, “The external and legal environment related to political and social issues continues to evolve.”
Farley may be a bit behind the curve here. The political and social environment has already evolved. Middle America, which supplies the bulk of the customers for most of the brands which have rolled back DEI initiatives, has already swung hard right. Donald Trump’s victory, rather than marking the start, was actually a culmination of this trend, which started a while ago.
Ask Bud Light. The Anheuser-Busch brand came under fire for its controversial partnership with transgender activist Dylan Mulvaney. In April 2023, the beer brand launched a special can celebrating Mulvaney’s “transition to womanhood”. Rather than open up a new market in the LGBTQ+ space, as it had hoped, this caused a massive boycott by conservative customers, leading to a 28% drop in sales. Worse, Anheuser-Busch’s stock lost nearly 7%.
Also Read: DEI: Don’t throw the baby out with the bathwater
These developments are not just about for-profit companies correcting course to adjust to new market realities. They mark the end–or at least the beginning of the end–of the idea that one can use affirmative action, or institutionalised “positive discrimination”, to correct perceived social inequities. It began in 1961 in the US, with then President John F. Kennedy signing executive order 10925, which was later formalised by his successor Lyndon Johnson, to create equal employment opportunities for African Americans. This laid the foundation for policies which, over the years, grew to embrace a whole spectrum of people viewed as disadvantages for reasons of race, gender or sexual orientation.
Six decades later, the wheel has turned full circle. While affirmative action remains on US statute books, the US Supreme Court effectively dismantled it last year, by ruling against affirmative action in college admissions. The actions of giant corporates like Walmart are bound to encourage others to follow.
The question is whether such a movement will spread outside the US. Affirmative action, of course, is not an American idea. India, for instance, started on its affirmative action journey much earlier by introducing caste-based reservations, which has now expanded to include a multiplicity of other causes, including gender equity. But this has remained confined largely to the government, with Indian corporates being exempted from any legal compulsions on reservations or quotas on this score.
Social pressure, aided by some regulatory push, was beginning to change this. Whether India Inc picks up cues from its US counterparts remains to be seen.
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