How DEI Rollbacks Are Leaving Women of Color and Latina-Owned Businesses Hanging

The rollback of diversity, equity, and inclusion (DEI) programs under Donald Trump’s administration has unleashed a ripple effect on corporate America. Latino small businesses are among those feeling the brunt, as companies cut back on initiatives originally designed to support entrepreneurs of color. Behind the headlines of major corporations reversing DEI policies lies a deeper story about opportunity, systemic bias, and what happens when the safety net for minority entrepreneurs is quietly pulled away.

DEI Programs Face the Ax: The Bigger Picture

From Walmart to Target, corporate giants are walking back their DEI commitments. These decisions follow President Trump’s executive order to dismantle DEI efforts within the federal government, as well as legal and political pressures on the private sector. According to CNN, Walmart announced it would halt racial equity training, phase out supplier diversity goals, and dissolve a $100 million Center for Racial Equity. Similarly, Target ceased external reporting on diversity metrics and scaled back initiatives supporting Black and Latino entrepreneurs.

These moves align with broader trends. Forbes reported that McDonald’s, Amazon, and Meta have also retreated from their DEI initiatives, citing the Supreme Court’s 2023 ruling against affirmative action as a factor. While some corporations frame these rollbacks as “refocusing business objectives,” others openly credit conservative pressure campaigns for influencing their decisions. Notably, Robby Starbuck, a conservative activist, claimed victory on X (formerly Twitter), celebrating these policy shifts.

How Corporate Cutbacks Are Hurting Latino Entrepreneurs

For Latino small business owners, these changes are not just symbolic. They directly undermine resources critical for overcoming longstanding barriers to financing and growth. According to The Wall Street Journal, only one-third of small businesses owned by Black and Latino entrepreneurs receive the full amounts of bank loans they seek. By comparison, that number rises to 50% for white-owned businesses. Compounding this disparity, minority-owned startups secured less than 2% of venture capital funding in the U.S. this year, the paper reported.

Recognizing these systemic challenges, many companies created grant programs to fill the gap. Yet, as Inc. detailed, PepsiCo’s grant for Latinx entrepreneurs—once offering up to $100,000—has been overhauled to remove ethnicity as a criterion. Similarly, Progressive Insurance altered its small business grants to drop requirements that recipients be Black- or Latinx-owned. These preemptive shifts reflect a chilling effect as companies seek to avoid potential lawsuits or public backlash.

The Domino Effect: Small-Scale Programs Disappear

The rollback isn’t confined to major corporations. Smaller organizations that modeled their DEI initiatives on these larger programs are now following suit. The Wall Street Journal reported that over 60 small-business grant programs tied to race or ethnicity criteria in 2023 have disappeared or become inactive. Of those that remain, 27% no longer prioritize minority-owned businesses in their selection process. For struggling entrepreneurs, this shift erases lifelines that once offered vital funding ranging from $10,000 to $20,000.

Take TikTok, for example. The platform launched a Latinx entrepreneur fund in 2021, which now appears defunct. Its webpage still lists an outdated application deadline from 2023, signaling the initiative’s quiet demise. Meanwhile, UBS ended its $1 million grant program for women of color entrepreneurs and redirected those funds to nonprofit organizations—a move that, while supportive, diverts direct aid from small business owners.

Conservative Activism Redefines the DEI Narrative

Conservative groups like America First Legal have played a pivotal role in this rollback. Inc. noted that the organization’s lawsuit against Hello Alice, a fintech platform supporting Black entrepreneurs, marked a key offensive. Though Hello Alice successfully defended itself in court, the legal battle drained its resources, forcing it to scale back its operations. Other companies, like PepsiCo and Progressive, opted for quieter compromises to avoid similar fates.

According to The Wall Street Journal, the anti-DEI movement is not only targeting corporations but also reshaping public perceptions of diversity initiatives. Terms like “woke” have become pejoratives used to discredit efforts aimed at equity. This shift in narrative has emboldened companies to retreat from policies once viewed as progressive and necessary.

The Human Cost of DEI Rollbacks

The dismantling of DEI programs goes beyond budgets and policies; it directly impacts people. Latino entrepreneurs, already grappling with systemic barriers, now face a future with fewer resources to help them scale their businesses. Federal Reserve data underscores this challenge: Latino and Black business owners are consistently underfunded, receiving fewer loans and smaller amounts compared to their white counterparts.

As Shaun Harper, a professor at the University of Southern California, told CNN, “Trump’s election gives business leaders who were never committed an easy out.” He predicts fewer people of color in leadership roles, reduced diversity training, and the erosion of DEI infrastructure in corporations nationwide. The resulting vacuum leaves entrepreneurs of color more isolated in a competitive marketplace.

What’s Next for Latino Small Businesses?

Despite the setbacks, some companies remain committed to DEI. Costco recently rejected a proposal to reevaluate its diversity policies, with over 98% of shareholders voting against the measure, according to Forbes. Similarly, Delta Airlines and JPMorgan Chase have reaffirmed their support for minority communities, emphasizing that diversity drives business success.

However, these examples are exceptions in an increasingly hostile environment. As DEI programs vanish, the question remains: who will step up to bridge the gap for Latino entrepreneurs? Without meaningful intervention, the rollback of these initiatives risks exacerbating economic disparities and stifling innovation in communities that need it most.