Since President Donald Trump’s executive order on Jan. 20 slashing government programs surrounding diversity, equity and inclusion – DEI – which he called “radical and wasteful,” a slew of Fortune 500 companies have followed suit.

In Los Angeles, the face of this trend is household entertainment companies like The Walt Disney Co. and Warner Bros. Discovery, both based in Burbank, and Paramount Global – whose subsidiary Paramount Pictures is headquartered in Hollywood.

The first to make the plunge was Disney. In early February, the company sent a memo to employees that it would be changing its “diversity and inclusion” factor for compensation planning to a “talent strategy” factor. The company pointed out that the new factor would still assess how leaders “incorporate different perspectives.”

Disney has also removed certain content warnings in films on Disney+ – such as acknowledging cultural appropriation or negative stereotypes of certain groups – and did away with its “Reimagine Tomorrow” initiative which amplified diverse voices and stories.

Next came Paramount, which informed employees in a Feb. 26 memo that it would end “aspirational numerical goals related to the race, ethnicity, sex or gender of hires” as well as halt collecting data relating to these factors in its application process unless legally required. Paramount also cut the DEI metric to its bonus incentive program, while still noting in the memo that “values like inclusivity and collaboration are a part of the Paramount culture and will continue to be.”

One day after Paramount’s announcement, Warner Bros. Discovery came out with similar changes including swapping its use of “DEI” for just “inclusion,” ending third-party workforce surveys and implementing a “uniform and consistent application process” for its hiring and programs.

None of these entertainment companies opted to provide comments to the Business Journal regarding these policy adjustments.

While the memo from Disney did not mention the current administration as a reason for making these changes, Paramount’s memo to employees opens by mentioning Trump’s executive order, using language such as “require,” “must” and “comply” when explaining why the company altered its policies. Warner Bros. was more indirect, citing an “evolving legal landscape in the United States and around the world.”

Following the release of Paramount’s memo, a group of employees submitted an open letter, criticizing the company’s decision and expressing operational concerns. The letter pushed back against Paramount’s insinuation that its hands were tied based on federal mandates, pointing out that Paramount “operates outside of government structure.”

Legal implications of the federal order

Jonathan Handel, an entertainment attorney at Feig Finkel LLP in Beverly Hills, said there is no binding legal requirement for companies to end DEI programs and initiatives at this time, calling companies’ actions “anticipatory obedience.”

“It’s caving to the will of an autocrat in advance of a legal requirement to do so and that is the road to perdition,” Handel said. “It leads nowhere good.”

As for why companies are removing DEI-related policies, programs and language ahead of an enforceable mandate, Handel said it’s “fear of risk exposure” coupled with “spinelessness.” Companies who may be relying on federal review for mergers and acquisitions or who have significant government contracts may not want to risk being a target for the Trump administration and his supporters, Handel said. 

This includes Paramount’s proposed merger with Skydance Media which has run into regulatory approval hiccups at the hands of the Federal Communications Commission which launched a bias inquiry into CBS News, a subsidiary of Paramount, in February. The merger was expected to close by April 7 but as of the Business Journal’s Thursday deadline, the FCC still had not signed off on the transaction.

An employee of Paramount at the time the memo was sent out said they weren’t necessarily surprised after reading the memo from Paramount’s chief executive trio, given the many other Fortune 500 companies who have been making similar policy changes as well as the general political environment. 

“Because of the state of the country, I knew something was coming,” the employee, who requested to remain anonymous, said.

Although this person said that they can in part understand why the company aligned with Trump’s DEI stance from a business standpoint, they view it as “cowardly” and wish the company would come up with creative ways to make up for any potential financial losses that don’t make “thousands of people feel unwanted.”

Policy impacts on employees

While the Paramount employee said they felt an air of “disappointment” in the work environment after the memo came out, there weren’t many conversations happening in their particular office. 

“There’s not too many people of color to even talk about it freely with,” the employee, who identified themselves as a person of color, said. “I probably wouldn’t have felt comfortable talking to other colleagues about it because it’s a sensitive subject and I’m still wrapping my head around how it affects me (personally) and in the workplace because it is so fresh.”

The lack of diversity in the workplace felt by this employee runs parallel to another concern brought to light in the previously mentioned open letter where Paramount staff accused the company’s 2024 layoffs of being “overwhelmingly from underrepresented and underestimated demographics.”

The Paramount employee corroborated this claim, noting that the ratio of Black employees laid off compared to non-Black employees seemed to be 2:1 in their office, despite there being fewer Black employees to begin with. Paramount did not respond to the Business Journal’s inquiry about its process for layoff selection.

“It did seem like a lot of people of color were affected,” the employee said. “I’m not sure if it’s really true that their positions were the ones being expunged but I do know that the people in my office that I worked with who were people of color were let go more compared to other people.”

And now without DEI-driven hiring initiatives and goals, “it’s just going to make it even harder trying to infiltrate the system,” the employee, who was introduced to the company through a diversity program themselves, said.

In a push against the Trump administration’s argument that DEI policies give certain groups unfair and disproportionate advantages, Handel points out that the impacts of slavery and segregation – as well as cultural and legal forms of discrimination against other groups such as the LGBTQ+ community – are far from over.

“We live concurrently in the past, present and with hopes towards the future and to deny the impact of history and the continuing power of the past on present day society is to engage in, at a minimum, willful blindness, and at worst, in continuing oppression,” Handel said.

Prioritizing a diverse workforce has both internal and external value, said Bilal Kaiser, the founder of West Adams-based PR firm Agency Guacamole, and founder of the DEI panel, Beauty, Lifestyle & Nurturing Diversity.

“The internal value is you begin to build a culture that allows people to show up and not worry about being ‘the other’ or worry about being an anomaly,” Kaiser said. “‘Am I the only Black woman here? Am I the only gay person here?’ You never want the employee to think that because that has a ripple effect on their performance, their interpretation of the company and its values and ultimately, what the rest of the world sees through that company.”

At Agency Guacamole, Kaiser said more than half of his employees are people of color and women.

Corporate output could be impacted

Aside from the effects of removing of DEI policies on workplace culture and morale, Handel and Kaiser said content production may be impacted.

Looking specifically at entertainment and media, Handel called DEI rollbacks “particularly dangerous.” 

“You can’t separate the effect of anti-diversity on hiring policies from the effect of anti-diversity on corporate output when the corporate product is (rooted in) communication,” Handel said. “… When you chill the employment prospects in the industry (by cutting) DEI policies, you also are chilling the content that the industry is likely to produce because you are chilling the access of diverse creators.”

Due to the nature of entertainment and media as shapers of perception and discourse, Handel attributed positive changes in attitudes toward certain groups in part to more thoughtful media representation in recent years, however, he knows that progress has the potential to see a retrograde.

To that end, Kaiser said it’s not just the content being produced that is impacted by having a diverse team; it’s also the manner in which a company markets its products.

“When you have a diverse workforce … the work that you put out there – as a service based company, as a consumer packaged goods company or as an entertainment studio – not only reflects the reality of the country that we live in, but it does so in a way that’s sensitive, that’s accurate, that’s not disparaging and that’s not offensive,” Kaiser said.

The duality of marketing toward and profiting off of underrepresented groups while slashing internal hiring commitments toward them was another issue that came up in the open letter written by Paramount employees. Additionally, the sudden pivot away from policies the company once stood firmly behind seemed to strike a chord in the letter.

“We are ashamed to be employees of a company that will bulldoze our ‘company culture’ for a shortsighted pursuit of profit,” the letter read. “Our company pillars cannot be written in sand, wiped away with the tide.”

The ability for these companies to abandon previous stances leads Handel to assert that this was never more than “performative corporate happy talk” lacking sincerity.

Kaiser implores studios rolling back DEI policies to consider the future citizens who will view the content these companies are making 10 to 20 to 30 years from now.

“Do you want them to be inspired by the inclusive values and vision that studios brought into their stories?” Kaiser asked. “Or would you want them to be wonder, ‘How could they be so tone deaf in 2025?’”