Why DEI Became a Liability — and What Companies Are Doing Instead

Written By Aparna Rae

For years, Rob and I ran data-driven equity workshops and leadership offsites. We were known for being rigorous and blunt — not the consultants who show up with a moving slideshow and a feelings check-in. People told us it was better than their Cornell certification. Program officers started sending their whole staff.

Then 2023 happened, and the word we'd built a practice around became something people were afraid to say out loud in a leadership meeting.

That wasn't paranoia. It's a documented trend, and the data on it is stark. Fortune 100 companies have cut mentions of "DEI" from their public communications by 98% over the past two years. Fortune 500 participation in the Human Rights Campaign's Corporate Equality Index — the benchmark disclosure companies used to compete over — fell 65%, from 377 companies submitting data to just 131. Companies that spent a decade racing to prove how seriously they took this work are now racing to prove how little they said about it.

Here's the part that should actually worry you if you work in HR or people strategy: the language retreated much faster than the substance did.

The theater-versus-substance gap

Only about 5% of companies have eliminated their DEI programs outright. Another 8% have reduced spend. That means the overwhelming majority of the "DEI rollback" story you've been reading about is a relabeling exercise, not a program shutdown. Companies aren't dismantling the work at anywhere near the rate they're dismantling the word.

Which raises the obvious question: if the substance mostly survived, why did the word have to die so fast?

Because the word had become a liability independent of what it actually described. Legal teams got nervous about litigation exposure. Political pressure made "DEI" a target regardless of what any specific program did. And once one high-visibility company backed off publicly, it became socially and competitively safe for everyone else to follow — a cascade, not an evaluation.

Watch what the label got replaced with

If you want to see where this is actually heading, don't look at what got cut. Look at what got renamed. Speaker bureaus — who make their living reading which way the wind is blowing faster than almost anyone — have quietly retired "DEI" from most of their listings in favor of "Belonging," "Human-Centered Performance," and "Equitable AI." Same speakers. Same core material. New words on the page.

That's not necessarily dishonest. Language that gets a room to actually listen instead of getting defensive is doing real work — I've built an entire framework, the Translation Matrix, around exactly this idea, because how you frame a true statement determines whether the room can hear it. But there's a difference between translating language so people can act on the substance, and swapping language so nobody notices you quietly stopped acting at all.

That difference is showing up in the data on trust. 71% of executives believe their organization is dedicating more resources to DEI-adjacent work than it was a year ago. Only 41% of employees perceive the same increase. That's a thirty-point credibility gap between what leadership believes it's communicating and what employees are actually receiving — and it's exactly the kind of gap that erodes trust faster than an honest "we're cutting this" ever would.

What it actually costs to cut and run

Of business leaders who cut DEI programs, more than a third reported lower retention and attraction of diverse talent as a direct result. One in four reported measurable reputational damage. These aren't abstract culture-survey numbers — they're retention and hiring costs, the most expensive line items HR has.

And it tracks with something the 2026 Edelman Trust Barometer found across the broader population: employees still trust their employer more than any other institution — 78%, the highest of any entity measured, ahead of business generally and far ahead of government. That's the asset most companies are quietly spending down every time they change course on something as visible as equity commitments without explaining why. Employee trust in "my employer" is disproportionately high right now. It is also, per the same research, unusually brittle — the same report found a hardening insularity, with 70% of people now hesitant to trust someone who differs from them in values or background. Trust is high and fragile at the same time. That's not a stable position to run a workforce strategy from.

The actual fix isn't a better label

Here's what I think most companies are getting wrong right now: they're treating this as a naming problem. Find the word that tests better with legal, swap it in, move on. But the employees who noticed the retreat aren't going to be reassured by a rebrand. They're going to be reassured by evidence — visible, checkable evidence — that the underlying commitment to fair treatment didn't disappear along with the word.

That's the whole premise behind what Rob and I now call Trust by Design. Not a workshop. Not a rebrand of DEI with softer branding. A methodology built on the idea that equity, done right, was always just good management — clear policy, consistent process, and data that tells you the truth about what's happening, not what you hope is happening. You don't need the word "DEI" to do any of that. You need the operational discipline to actually do it, whatever you call it, and the willingness to let employees see the evidence.

The companies that will come out of this moment with intact trust aren't the ones who found the safest new word. They're the ones who kept doing the work and can prove it — with the same rigor they'd apply to any other business function that mattered.

If your organization is navigating this exact question — how to keep the substance of equity work alive without the word becoming a liability — that's precisely what the Trust by Design framework was built for.

References

Aparna Rae https://aparnarae.com
Previous

Psychological Safety vs. Trust: What's the Difference and Why It Matters
Next

What to Look for in a Trust and Equity Keynote Speaker