A new UC Berkeley study finds no statistically significant financial penalty for major companies that maintained diversity, equity and inclusion programs after the Trump administration’s 2025 crackdown. For California, the bigger question may be what happens to economic opportunity when companies change those programs.
The new analysis from UC Berkeley is challenging one of the central assumptions surrounding the corporate retreat from diversity, equity and inclusion: that companies maintaining DEI programs would be financially punished for doing so.
The study, by Hanna Folsz and Jacob M. Grumbach of UC Berkeley’s Democracy Policy Lab, examined S&P 500 companies after President Donald Trump’s January 2025 executive order targeting DEI programs.
Its finding is narrower and more useful than saying DEI is good for business.
Companies that maintained DEI did not experience a statistically significant financial penalty compared with companies that rolled back their programs. The researchers found no significant difference in stock-market performance and no significant difference in revenue.
That does not mean DEI makes companies more profitable. It means the financial punishment that might have been expected from maintaining those programs did not appear in the study’s data.
For California workers and business owners, that distinction matters because the debate over DEI is increasingly moving beyond corporate terminology and into questions about hiring, advancement, workplace opportunity and access to contracts.
The researchers compared S&P 500 companies that maintained or reaffirmed DEI programs after Executive Order 14173 with companies that did not.
Their narrowest group contained eight companies that publicly reaffirmed their commitments: Apple, Cisco, Costco, Delta Air Lines, Dollar Tree, JPMorgan Chase, Microsoft and Pfizer. The researchers also used broader measures, including a corporate DEI classification, the amount of DEI-related language in annual 10-K filings and shareholder votes on anti-DEI proposals.
That’s important because corporate DEI is not a single program.
A company can eliminate a department while retaining recruiting initiatives. It can change the name of a program without eliminating its activities. It can remove the word “DEI” from its website while continuing work related to workplace inclusion or supplier diversity.
The researchers encountered several examples.
JPMorgan later changed the name of its program to “Diversity, Opportunity, and Inclusion” and reduced mandatory training. Pfizer renamed its DEI webpage to emphasize merit, while Dollar Tree changed its DEI page to “Culture of Belonging.” The researchers said their results remained robust even when JPMorgan was excluded from the analysis.
That makes the study’s central question less about a corporate label and more about what companies actually do.
Investors did not deliver a clear financial penalty
The researchers examined cumulative abnormal stock returns, the difference between a company’s performance and what would be expected based on broader market movements.
Across their principal models, they found no statistically significant difference between companies that maintained DEI and those that did not.
They also examined the seven trading days surrounding the January 21, 2025 executive order and found no significant short-term difference in abnormal returns.
The researchers then looked at revenue, which offers a different test.
Stock prices reflect investor expectations. Revenue reflects actual sales.
Using quarterly company data, the researchers examined eight quarters covering January 2024 through July 2025 filings. Their preferred models, those comparing firms within the same industries and quarters, produced estimates close to zero and statistically insignificant. The researchers concluded that the estimates were precise enough to make a large revenue penalty unlikely.
That is the most important takeaway:
The study does not show that companies benefit financially from keeping DEI. It finds that the companies studied did not appear to be financially punished for doing so.
But corporate DEI is changing anyway
That creates a more complicated picture.
Companies do not have to choose between maintaining a traditional DEI department and eliminating every activity associated with diversity and inclusion.
They can change the terminology, move responsibilities into human resources, modify training, alter recruiting strategies or change how they measure workforce representation.
The Berkeley research itself documents examples of that evolution.
So asking whether a company “ended DEI” can sometimes obscure the more important question:
What changed inside the company?
That question is especially relevant in California, where workforce data show substantial differences in wages, industry representation and access to higher-paying occupations.
California’s workforce makes the question bigger
Latinos now account for about 39% of California’s workforce—roughly 7.8 million workers, according to the UCLA Latino Policy and Politics Institute’s 2026 State of Latinos in California report.
The same report finds that Latino workers remain disproportionately represented in several lower-wage industries, including agriculture, construction, hospitality and retail, while remaining underrepresented in higher-paying sectors such as professional and scientific services, finance, insurance and real estate.
The report also documents substantial wage differences. In 2023, the median hourly wage was $18 for Latinas compared with $29 for non-Latina women, while Latino men had a median hourly wage of $20 compared with $35 for non-Latino men.
These numbers do not prove that corporate DEI programs caused or could eliminate those gaps.
They do establish something else:
Access to better-paying jobs and economic mobility remains a significant issue for California’s Latino workforce.
That is why changes in corporate recruiting, advancement and workforce practices are worth watching even when the financial effect on the companies themselves is difficult to detect.
Readers following those issues can also explore Parriva’s broader California coverage and Workforce & Economy coverage for reporting on jobs, wages and economic opportunity.
The question is what happens to opportunity
This is where the national DEI debate can become too abstract.
For a worker, the practical question may not be whether a company has a DEI office.
It may be whether the company continues:
- recruiting at historically underrepresented colleges and communities;
- developing pathways into management;
- measuring who is hired and promoted;
- reviewing compensation patterns;
- maintaining employee resource programs;
- supporting supplier-diversity efforts; or
- investing in recruiting and contracting relationships with businesses that have historically had less access to large corporations.
Those activities are not identical, and the Berkeley study does not measure their individual effects.
But separating them from the political debate makes it possible to ask a more useful question:
When a company says it is changing its DEI strategy, what actually changed for workers and suppliers?
Latino-owned businesses are part of the story, too
The issue extends beyond employment.
In Los Angeles, the city held its first Latino Business Procurement Summit in May, bringing more than 350 Latino business owners and entrepreneurs together with organizations and companies seeking to connect businesses with contracting opportunities. The city said billions of dollars in contracts are expected to become available as Los Angeles prepares for major international events.
Los Angeles also maintains procurement resources for small and minority-owned businesses, including certification and contracting guidance through the city’s Business Navigator.
That provides a concrete example of why the distinction between “DEI” as a corporate label and actual economic practices matters.
A business owner may not care what a corporation calls its supplier-diversity program.
The practical question is whether the business has a meaningful opportunity to compete for a contract.
For Latino-owned businesses, that can be a significant economic question.
California’s pay-data system gives the state another way to monitor workforce differences.
Employers covered by the state’s reporting requirements submit demographic and pay information to the California Civil Rights Department. The reporting system’s 2025 filing deadline was May 13, 2026.
That data cannot tell us whether a particular corporate DEI program works.
It can, however, help researchers and policymakers examine patterns in pay and representation.
Measuring a disparity is not the same as proving its cause.
And eliminating a corporate program is not automatically evidence that a disparity will widen.
Both conclusions require additional evidence.
The study has important limits.
It examines large publicly traded S&P 500 companies. It does not establish what happens at small businesses, privately held companies or nonprofit organizations.
It also does not measure the effect of individual DEI initiatives on Latino workers, Latino-owned businesses or specific communities.
And because the study examines the period following the January 2025 executive order, it cannot by itself establish the long-term consequences of corporate policy changes.
Most importantly, the findings should not be interpreted as proof that DEI programs increase profits.
The evidence supports a narrower conclusion:
For the large publicly traded companies examined, maintaining DEI after the 2025 executive order was not associated with a statistically significant financial penalty.
What happens to workers, applicants and suppliers when companies change those programs is a different question.
The California question may be bigger than the DEI debate
California’s Latino workforce is already a central part of the state’s economy. UCLA’s 2026 report describes Latinos as approximately 40% of the state’s population and 39% of its workforce, while documenting persistent gaps in wages, education, industry placement and economic mobility.
That means the next phase of the corporate DEI debate should not be measured only by how many companies remove the term from their websites.
A more useful measure may be what happens afterward.
Are recruiting pipelines changing?
Are promotion patterns changing?
Are workforce disparities narrowing or widening?
Are Latino-owned businesses gaining or losing access to major contracts?
Are companies simply changing the language around existing programs—or changing the programs themselves?
Those are measurable questions.
And for California workers and businesses, they may ultimately matter more than what the programs are called.
