Corporate DEI Rollbacks Expand as Citigroup and PepsiCo Scale Back Initiatives

The corporate retreat from diversity, equity, and inclusion (DEI) programs gained momentum this week as Citigroup (C) and PepsiCo (PEP) announced significant rollbacks to their diversity policies. The decisions come amid increasing scrutiny from the new administration in Washington, D.C., and shifting legal and regulatory landscapes.

Citigroup Scales Back DEI Hiring Policies

In an internal memo to employees, Citigroup CEO Jane Fraser outlined the banking giant’s decision to discontinue its policy requiring hiring managers to consider a diverse pool of candidates for open positions. Additionally, the company’s “Diversity, Equity and Inclusion and Talent Management” team will be rebranded as “Talent Management and Engagement.”

“It is important to note that we’re living in an environment where things are changing quickly,” Fraser wrote, signaling the bank’s response to evolving regulatory pressures.

PepsiCo Phases Out DEI Officer, Alters Hiring Goals

PepsiCo CEO Ramon Laguarta conveyed similar changes in a company-wide message, announcing that the beverage and snack conglomerate would no longer have a dedicated DEI officer and would sunset its workforce representation goals. Instead, the company will shift toward a broader “inclusion for growth” strategy.

“As we have always done, we will continue to hire and promote the best talent, ensuring we reflect the skills and perspectives needed to succeed in a competitive market,” Laguarta wrote, positioning the changes as part of PepsiCo’s longstanding commitment to inclusivity.

Broader Corporate Trend Amid Legal and Political Shifts

Citigroup and PepsiCo join a growing list of major U.S. corporations—including Meta (META), Walmart (WMT), McDonald’s (MCD), Lowe’s (LOW), Ford (F), and Target (TGT)—that have dialed back DEI programs in response to legal and political developments.

The trend accelerated following the 2023 U.S. Supreme Court ruling in Students for Fair Admissions v. Harvard, which struck down race-conscious admissions policies, and an executive order from President Donald Trump eliminating federal DEI programs while directing agencies to investigate private-sector DEI policies.

Fraser specifically cited these regulatory shifts in her memo, stating that recent federal policy changes, including new rules for government contractors, necessitated adjustments to Citigroup’s global diversity strategies.

Wall Street Adjusts DEI Commitments

Other major financial institutions have also modified their approach. Earlier this month, Goldman Sachs (GS) announced it would no longer require its IPO clients to include women or minority candidates on their boards. Meanwhile, JPMorgan Chase (JPM) significantly reduced references to DEI in its latest annual report, eliminating nearly all mentions of the phrase compared to the previous year’s filing.

JPMorgan CEO Jamie Dimon, who has historically championed diversity efforts, told employees in a private town hall that recent legal changes and his broader push to cut bureaucracy led to a reevaluation of the bank’s DEI programs.

“Obviously, we have to accommodate the law. So the law changed. We can’t have quotas,” Dimon said in a recording obtained by Yahoo Finance. He also expressed skepticism about the effectiveness of bias training programs and criticized spending on what he called “stupid” initiatives, vowing to eliminate wasteful expenses.

As corporate America recalibrates its approach to workplace diversity, the debate over the role of DEI initiatives in hiring and talent development continues to evolve, shaped by shifting legal frameworks and economic priorities.