By Siddharth Cavale
(Reuters) – Target (NYSE:) is ending its diversity, equity and inclusion program this year, the retailer said on Friday, the latest U.S. corporation to step away from such policies in the face of severe scrutiny from conservative groups.
Over the last year, several major companies, including Walmart (NYSE:), Amazon (NASDAQ:), and Meta (NASDAQ:), have rolled back their DEI policies, and earlier this week, President Donald Trump directing federal agencies to terminate DEI programs and urged private companies to end “illegal DEI discrimination and preferences.”
But the Minneapolis-based retailer’s decision met with notable criticism, with some noting the company’s reputation for inclusiveness has helped it attract a younger, more diverse consumer base.
“For Target, with an inclusive audience, this is their version of brand suicide,” said Eric Schiffer of Los Angeles-based Reputation Management Consultants, which advises U.S. corporates and Hollywood celebrities.
Target also said it was ending its Racial Equity Action (WA:) and Change (REACH) initiatives this year, under which it had pledged to invest over $2 billion with Black-owned businesses by the end of 2025. The initiative included plans to add more than 500 Black-owned brands and a funding program from its in-house media company, Roundel, to increase exposure of diverse-owned brands through paid media.
The retailer added that it was changing its “Supplier Diversity” team to “Supplier Engagement” in a bid to better reflect “its inclusive global procurement process.”
“Target is making a mistake by ending its DEI goals with its customer base being highly diverse,” said Sylvester Turner, Congressman for Texas’ 18th Congressional District, on X.
DEI programs, designed to promote opportunities for women, ethnic minorities, LGBTQ+ people and other traditionally underrepresented groups, gained traction after nationwide protests in 2020 over police shootings of unarmed Black people. However, they have been criticized by Trump and conservative groups as being discriminatory against other Americans and for undermining merit in hiring and promotion.
“Many years of data, insights, listening and learning have been shaping this next chapter in our strategy,” Target’s chief community impact and equity officer Kiera Fernandez said in a memo, adding that it was important to stay in step with the “evolving” external landscape. The company did not comment outside of its statement.
According to Target’s 2023 workforce diversity report, the retailer’s workforce comprised 56% female employees and 43% male employees. The racial and ethnic distribution was similarly balanced, with 56% of employees being people of color and 43% being white.
Target’s stores host LGBTQ-related goods during Pride month, attracting a more diverse customer base than bigger rival Walmart, which announced cuts to some of its DEI initiatives late last year. However, in 2023, Target pulled some LGBTQ-themed merchandise from stores, citing increased confrontations between shoppers and employees and incidents of products being thrown on the floor.
In 2016, Target said that transgender employees and customers could use bathrooms corresponding to their gender identity, at a time when a heated national debate had sprung up on the issue. It was the first big retailer to address the matter.
At a retail conference in New York this month, Target’s CEO Brian Cornell said the company’s growth over the past years came down to investing in people and creating a culture of care and growth.
On Thursday, Costco Wholesale (NASDAQ:) shareholders voted overwhelmingly against a proposal requesting a report on the risks of maintaining its diversity and inclusion initiatives.
