Why Companies dropped DEI

Did companies drop DEI because of the Trump administration, or is there something more to this behavior? Kara and Deanna discuss how the labor market factors into corporate decisions.

Articles referred to in the podcast:

https://www.nytimes.com/2026/02/02/opinion/silicon-valley-trump-minneapolis.html

https://www.techdirt.com/2026/02/03/turns-out-they-didnt-really-want-you-to-bring-your-whole-self-to-work/

Transcript

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Hi, I'm Deanna. And I'm Kara. And this is the Got PS podcast, the podcast where we talk about all things psychological safety. So Kara, why do you think DEI is now a bad word in corporate speak? I've been seeing people think that it actually is instead of leveling the playing field, which that's why it was created, was to give opportunities to those who traditionally were overlooked, people think it's tipping the playing field against those who always were in power to begin with. And you think that's why all the big tech companies, Apple and Meta and Google and such, got rid of all their DEI programs, because they decided it was moving too far in the other direction? Oh, no, they're sucking up to the president. Okay. I've got a very interesting article here written by Aaron Zemost, and I apologize to Aaron if I completely butchered his last name. Mr. Zemost is a tech communications consultant and former head, of communications policy and people at Square, and he's talking about why we got rid of all these nice programs, whether it was DEI various employee-centered programs recently. It's not because Trump took power so much. It has all to do with the labor market. You're kidding me. This is the proposal. When the labor market is tight, and let's face it, in COVID, coming out of COVID, especially in the tech sector, the labor market was really tight. All these companies wanted to hire great, top engineers, and there's only a limited number of them, so they were really struggling to figure out how to differentiate between themselves. Now, back in the early 2000s in the first dot-com, boom- They did that by offering all sorts of goodies. There was, free food and parties, and free clothing, all sorts of things to try and differentiate themselves and make them attractive to the engineers they're trying to compete for. This time around, companies really focused more on making work feel more homey and fitting for the engineers. Surveys show the majority of engineers lean Democratic, so by embracing all these sort of Democratic tropes and saying, "We're for the social justice, and we don't think this, and we want you to bring your whole self," and everything, they were using this as a way to try and differentiate themselves from the competitors for top talent. Wow. I would've not expected that, but of course... I will say administration changes still impact that though, right? Because when you have Republicans more in Congress, they are usually more leaning towards making policies that allow corporations to be in the driver's seat more than workers. Well, yeah. So this is falling into that bucket some. Some, but some of it is literally just labor market. The labor market now is very I'll say loose or looser, as in the companies over-hired during COVID times, and now with AI coming and stealing people's jobs, they're letting people go right and left. Suddenly the labor market isn't tight. They don't need to do special things to keep the top talent because the top talent looks around and says, "Shoot, there's nothing for me to go to." So they're staying, and the companies are like, now I can get rid of all these programs that, A, cost me money, B, distracted my workers from, spending eight hours grinding on what I want them to do, and, C I never really cared about anyway because the primary thing I care about is making money." We know that because we used to have those programs where we worked, and there were two, three, four staff members at a high level that used to run those programs. We had, budget including hours and some spending money for some, tchotchke and fun stuff, and events- Mm-hmm and everything, to employee resource groups that, for the most part were volunteer-run. Definitely you're saving money doing that. I guess when I'm thinking of DEI I'm also thinking of policies that go towards how we pick and choose people to interview in the first place. But that is, now that I'm thinking about it, that's like a separate kind of legal thing, is it not? Yes, it is. Think back, 'cause I know you were involved in hiring in the early 2020s. Mm-hmm. And it was so tight, and we were really struggling to hire new people, and to the point that we hired some people we might not have otherwise. What were the things you were telling them? Why were you telling them to come to our company? I'm willing to bet it wasn't money. It was doing something that they felt was important. It was, good work/life balance. It was an amazing retirement, things like that. Because we were trying to differentiate ourselves from the other companies out there to compete for talent. True, and we also were spending more money on learning resources, training- that kind of support. Mentoring, job shadowing, all of that kind of stuff. And you're right. What is interesting right now when you think of looking at, online hiring recs. You go across LinkedIn and you look at the technical fields, the requirements that they're looking for are crazy. The number of years of service. There's usually not as much, like, wiggle room in what they're looking for because they know they can be harder, they can be more selective. Exactly. Which makes it kind of crazy to go out and try to apply for anything. It is. And we could go into the differences between men and women applying for jobs, but that's not what we're trying to talk about here. We're trying to talk about why the corporate environment seems to have so dramatically changed in the past year or so. And while, some people just like you would have thought it was political, Mr. Zamost's theory is it has more to do with the labor market, and there's a good follow-on article that is in TechDirt by Mike Masnick talking about this. He actually has an undergrad in labor relations, and it's basically when you're competing for a small pool of people, you do all sorts of things to make yourself be the place to go. But nobody actually wants to do that. They may claim that they care, and they may say they support this, but the purpose of a business is to make money, and now that they don't have the same labor market, they're going back to their core value, which is make money. Okay, this is where I'm struggling with it, though, is that while, I can understand that argument, my bigger issue with that is just that it aligns perfectly with the president's desire to get rid of DEI. And I think that was one of the first executive orders that he signed when he came into office, on his first day is- Yes Get rid of DEI. I would agree But if it was still a really tight labor market, they might have rebranded their DEI, but they would have kept it because they needed to attract top talent, but now they don't. There's a great quote, from the TechDirt article which is "What people are missing is how utterly banal the explanation actually is. It's got nothing to do with ideology. These are business actors responding to incentives. When employees had the leverage, executives catered to them. When executives got leverage back, they stopped." So the theory is the current political climate is encouraging them to be that way, but the labor market is really the primary influencer. Wow. So for those that are in any kind of marginalized group, you're telling me this is kind of like a double whammy? Yes. They have two places that basically are making them feel unsafe in their job, either their current job or their job search, which is you've got the political climate is that, "Oh, you're getting an unfair advantage if you have DEI." And in the political climate, DEI is equated to hiring, more- minority groups- as opposed to just making the environment more comfortable for them once they're there. And again, that's why I personally was conflating those two things. Not only are they dealing with the general political group, they're also now walking into a company that is more boldface not caring about them as much. Correct. Yeah, the company never really cared. They just pretended to care because that's what they needed to get people, so now they're back to the way they always wanted to be. So circling back to kind of the conversations we've had in the past. One thing about the way we talk about psychological safety that is different from, others like Amy Edmondson and others, is that there's two facets we always talk about that we feel are, extra than what Amy Edmondson, talks about, which is what is the world and corporate level like, bigger things that are going on that can bleed into your local team. And then also, what are your issues, lenses, and everything that you bring such that when you're in a team, how you perceive interactions going on in the team and how your treatment is. You've got that personal view, and then you've got that global and corporate kind of shenanigans going on. Right. And this is really falls into global and corporate shenanigans. And this sets all of your psychological safety back. You can still obtain it in your group, but it's gonna take a lot more effort, because rather than starting on a level playing field, you've got people who are deep in ditches, and you're going to have to help them build ramps to get out of those ditches just to get to a level playing field so that you can build psychological safety. You may not actually be able to succeed at that, unfortunately, because of these outside influences, but it's something to think about. You can do everything right, and people will still not feel safe. Absolutely, 100% true. We have worked with people who are in some of these groups, that because of what they're hearing on social media writ large, because of, the change in president and everything else, they're never sure when they meet a new person, are they gonna be aligned with current, popular ideology emanating from the president or not? Every situation that they come into, be it with your customers, new team members, whatever, they're having to feel out that relationship in a way that those of us who aren't part of minority groups, we may struggle, but we don't struggle in the same kind of way. And it's very, very difficult for them to navigate. They have a lot of baggage that they have to figure out. I wanna just remind all of you leaders out there, be kind to people in your teams. They're probably struggling in ways that you're not aware of that's like another thing we've talked quite a bit about, maybe not on the show, but between the two of us, is that leaders can only do so much. A lot of the popular group trainings around psychological safety, they're almost always focused at the leader. The leader needs to do this, the leader needs to set the stage. And while I do agree with that, that there is some extra responsibility for leaders, like we're talking about now, you got people coming in that are dealing with XYZ going on out there. We're talking about DEI and the removal of it, and the conversation around it, and how that makes them feel about themselves. But there's other things people could be bringing in as well, and as a leader, there's only so much you can do. You can do your best. You may not create the perfect space for them to be in. So not just be kind to the people around you, but be kind to yourself, too. You may do everything right and still not succeed in building a psychologically safe team, and it's not your fault. It's not anybody's fault really, but understand that you may not be able to accomplish it because of people being in different places in their heads right now. Let me ask you this question. How personally did you feel when you started hearing corporations were getting rid of DEI initiatives employee engagement, and all that kind of stuff? What was your personal reaction, and how did it make you feel coming to work? I've been through this before. I was there when the whole dot-com bubble burst the first time, so I was less upset and horrified this time around because I've experienced it before. The first time around it was just the most horrible, shocking thing that had ever happened, and we all wanted to just throw up our hands and quit. Several of us started looking, but there were no jobs to be had, which is of course why we suddenly had everything being tightened on us. This time around, am I happy? No. Have I started looking for a new job? Maybe. Are there any new jobs available? Not really. And this is why companies can get away with this. What's interesting too is, we are of ages and career lengths that when we started working There was still some places you could go where you thought, "Oh, I have a job here, like I'm set for life." Remember those days, Deanna? Those days are long gone. Yeah. I know. I know. I'm originally from, Binghamton, New York area. IBM was a huge employer there. My parents met there. If you got a job at IBM, you were set. You were gonna spend 30, 40 years there. You wanna talk about perks. It's not DEI perks, but just like employee perks. We had a country club that everybody was a member of, I used to get taken to the baby pool when I was little and go to all kinds of stuff. Those days are long gone. I feel like it hits me a little bit differently or harder just because I have memories of you used to get hired at IBM and be there forever, and now that's not the case anymore. Got it. And something that you and everybody listening should think about is labor markets are cyclical. That means sooner or later, there's going to be a demand for talent and a very limited pool, and companies are going to have to start pulling out all sorts of extra perks to bring people on, whether it's food and games and work-life balance, or whether it's value-driven or anything like that. It's going to come back. When you hear that, don't believe them. They're all lying. They're just doing what they need to do to get people on board. What would be your number one tip to help people stay psychologically safe through those cyclical times? You need to acknowledge that these times exist, and you need to let people know that despite what corporate is saying, you want to be there for them as best you can be. They always say, "People don't leave companies. People leave managers." Make yourself a manager people don't wanna leave. What I've been telling some of the younger women that we work with is a great way to feel confident as things change is be on top of your finances. It's so practical, but it's true. It's a good point. If you feel like you're paying yourself first, you're saving all your pennies and everything else, and you have that emergency fund and everything, you do walk a little straighter, it's like self-care, but financial. Make sure you're, getting the most financially. You're saving your pennies and then you don't feel like you're as beholdened to the company. As they go up and down, you're like I'm leveraging everything I can out of them financially, so all right. We're both taking care of each other." And You can always look. What's the worst that's going to happen? Nothing. You stay in your current job. What's the best that can happen? You're going to get offered a job that's amazing and exactly what you wanted, and you're gonna move on in the world. Either way, it doesn't hurt, and it's probably worth doing even when the labor market is tough and you're getting every single thing you want from your employer. Because eventually, the tides will turn. And speaking of psychological safety and interviewing, you interview 100 times better when you already have a job and you're just looking. You feel a lot more confident. You feel like, "Hey, I got nothing to lose," so you just show up with that more confident manner, and you're a little more apt to be able to get a bite I think that's enough for today, so thank you for your insight, Kara. Thank you for bringing this forward. I had absolutely no idea that I was looking at things just completely from a more political standpoint instead of just brass tacks. It's really more about the labor market. And someday again, the labor market will tighten, and the employee shall rise in power. Amen. All right, guys. Thank you so much for listening. We'll talk to you in a couple weeks.