The Damaging Consequences of Target's DEI Rollback

In early 2025, Target made a controversial decision to scale back its DEI initiatives. This move, which included the conclusion of a key racial equity program, team rebranding, and changes to supplier diversity efforts, has sparked significant backlash, legal challenges, and financial repercussions. The decision is part of a broader corporate shift that some companies have been making in response to external pressures, but for Target, the impact has been particularly pronounced.

One of the most notable changes at Target was the termination of Target’s three-year Racial Equity Action and Change (REACH) program, which was initially implemented to address racial disparities and increase opportunities for underrepresented groups. While the company framed this as a planned conclusion of the program, critics argue that the end of REACH signifies a deeper retreat from the company's DEI commitments.

Additionally, Target rebranded its "supplier diversity" team to "supplier engagement," signaling a shift from prioritizing diverse suppliers to a broader, more neutral procurement strategy. The company also withdrew from third-party diversity benchmarking efforts, such as the Human Rights Campaign’s Corporate Equality Index, a move that some industry experts interpret as a step away from transparency in DEI performance.

These changes align with a broader trend among corporations facing increased scrutiny over DEI-related policies, particularly from conservative political groups and shareholders pushing back against what they perceive as "woke capitalism." However, the financial and reputational costs of such rollbacks are proving to be damaging.

While Target has not explicitly confirmed layoffs as part of its DEI rollback, internal restructuring suggests shifts in responsibilities and potential downsizing of teams dedicated to diversity initiatives. Employees and external partners have voiced concerns that the reorganization deprioritizes efforts to create an inclusive workplace and support underrepresented business partners.

Notably, Black-owned businesses that previously benefited from Target’s supplier diversity program now face uncertainty about their future partnerships with the retail giant. One such business is BLK & Bold, a Black-owned coffee brand that was also the Official Black Wall Street 2020 Social Entrepreneur of the Year award winner, continues to be stocked at Target but expressed disappointment in the company’s DEI shift. BLK & Bold co-founder Pernell Cezar emphasized the importance of corporate diversity efforts in sustaining Black businesses and called Target’s retreat a setback for minority entrepreneurs.

Civil rights groups and community leaders have criticized Target and other corporations for stepping back from its DEI commitments. In response, consumers have boycotted, taking their business elsewhere until the company reinstates its diversity programs.

As a result, the company’s stock took a notable 12% hit following the announcement, reflecting concerns about potential long-term damage to brand loyalty and consumer trust. Analysts suggest that pulling back on DEI initiatives could alienate a segment of Target’s customer base that values corporate commitments to diversity.

Adding to the company’s troubles is a class-action lawsuit filed by a group of investors who allege that Target misled shareholders about the financial risks associated with its DEI policies. The lawsuit claims that Target failed to adequately disclose how scaling back its diversity efforts could harm its reputation and sales, leading to losses for investors.

Target’s retreat from DEI hopefully serves as a cautionary tale for other corporations weighing similar moves. While businesses must balance competing pressures from different stakeholder groups, the long-term risks of scaling back diversity initiatives—including financial losses, reputational harm, and employee dissatisfaction—may outweigh any short-term political appeasement.This also shows how powerful we are when we act with our dollars.

The aftermath of Target’s DEI rollback is still unfolding, but as consumers, investors, and community leaders continue to hold corporations accountable for their commitments to diversity and inclusion, Target’s decisions will likely influence broader corporate trends. Whether the retailer will adjust course in response to mounting pressure remains to be seen, but one thing is clear: the damage has already been done.

No matter what these corporations do, it’s always a good time to Buy black. Head to OBWS.com, where you can discover thousands of Black-owned products and services you can shop today.

If you’re a Black founder, head to founders.obws.com and apply to join the fastest growing community of ambitious Black founders and aspiring entrepreneurs.