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Less than three weeks into his second term, President Trump has made it clear that his years-long attack on diversity, equity, and inclusion is a core priority for his administration. Across a slew of executive orders, Trump has set his sights on dismantling DEI initiatives in the federal government and militarybut he has also gone a step further and targeted the private sector. Trump has revoked a critical executive order dating back to 1965, which addressed discriminatory hiring practices across federal contractors and was critical to promoting racial equity; in the same executive action, he also directed federal agencies to open investigations into private sector companies to snuff out DEI programs that constitute illegal discrimination or preferences. All this comes nearly two years after the Supreme Court ruling on affirmative action sparked a wave of lawsuits from conservative activists, who have taken aim at DEI efforts across the public sector and private companiesleading some major employers to alter or roll back parts of their diversity programs. Several companies, among them Walmart and McDonalds, have made notable changes to their DEI goals and stopped participating in the Human Rights Campaigns annual survey that measures workplace inclusion for LGBTQ+ employees, while Meta will no longer have a dedicated DEI team. But the wave of executive orders Trump has issued since taking office could pose a new threat to corporate DEI, whether or not they hold up to legal scrutiny. Employment lawyers like Aaron Goldstein worry that the vague language of Trumps executive order targeting the private sector will push companies to take an extreme position on DEI. We don’t know what the Trump administration is necessarily going to be going after, and we don’t really know what the consequences are, he says. When the government doesn’t tell you precisely what you can or cannot do, or the consequences for doing it, it makes rational people run for the hills. The executive orders have sparked chaos and panic among corporate leaders, according to Kenji Yoshino, though he points out that Trump has limited legal authority over DEI work in the private sector. He can put the muscle of the executive branch behind lawsuits targeting the private sector for illegal activity, but what is illegal is not going to depend on standards set by him, says Yoshino, a constitutional lawyer and the director of the Meltzer Center for Diversity, Inclusion, and Belonging at NYU Law. Ultimately, these cases filed against the private sector are going to be resolved in the federal courts, according to federal statutes. The bigger question, Yoshino says, is whether companies will feel even greater social pressure to retreat on DEI issues that they might view as controversial or under attack by the Trump administration, like gender identity and trans rights. There’s no law that says you can’t participate in a survey, he adds, citing the Corporate Equality Index, HRCs annual survey. But if [employers] lean out from social issues too much, then they’ll get hit from the left and their own employees saying: We thought you were committed to diversity, equity, and inclusion. You said that a million times. Why are you backtracking so quickly at the first sign of resistance? How companies are reacting to the executive orders Some experts in the DEI space argue that many corporate leaders are unlikely to entirely cut diversity work, despite the public statements companies have made in the last year that signal a wavering commitment to corporate DEI. Most companies with sophisticated internal legal teams aren’t that concerned because they have already been looking at and evaluating their practices even before Trump took office, says Joelle Emerson, the cofounder and CEO of culture and inclusion platform Paradigm. Now that doesn’t mean the administration might not seek to create a lot of distraction [with] attacks on companies, even though ultimately the investigation might be frivolous. I do think high-profile companies may have some concerns about that. In fact, Emerson believes that some of the changes companies have been making to their diversity programsboth since affirmative action was overturned and more recently, in light of Trumps anti-DEI effortsare not nearly as extreme as they might appear on the surface. In certain cases, the changes could even be a corrective to some of the more hollow commitments companies had made in response to public pressure during the pandemic; some of the employers that have pulled back on DEI may never have been genuinely invested in advancing those efforts. When looking closely at 15 statements put forth by companies that have seemingly rolled back DEI programs over the last year, Yoshino and his team concluded that only one employerTractor Supplyhad effectively disavowed all diversity efforts. “The other 14 companies were saying, ‘We of course still believe in inclusion and belonging; we’re just retreating from these policies,'” Yoshino said, describing the response from companies as a “performance of retreat.” As for how corporate leaders should proceed, given the threat of legal action, many DEI experts are urging companies not to make rash decisions about the future of their diversity work. I think the orders are designed to have a chilling effect and get companies to stop doing way more things than the law actually requires them to stop doing, Emerson says. And thats what I worry about. I just keep encouraging companies to read the executive orders carefully and not over comply. Employers dont need to eliminate employee resource groups, for example, or stop conducting pay equity audits, she says. Alvin Tillery, a professor at Northwestern University and founder of the consulting firm 2040 Strategy Group, has counseled many employers to hold tight and wait until youre sued. If companies overcorrect or take extreme measures to protect against the Trump administrations scrutiny, they could also risk inviting more traditional discrimination claims. (In a new regulatory filing, Pinterest actually cited the attacks on DEI as a potential business risk, noting that if its diversity programs are “perceived as insufficient or overdone,” the company might struggle to attract talent or face legal action.) What’s funny is when most of these companies started to do DEI work, they found it [was] actually helping the bottom line, Tillery says. Lawsuits go down. The workers like us better. So those folks that are standing pat are either smart enough to see that it helps their business, or they’re worried about some further regulatory shifts coming down the pike for other parts of their business. What companies can do to continue DEI work Even amid conservative backlash and the threat of legal action, corporate DEI remains popular. In surveys conducted by the Pew Research Center, support for these programs fell between 2023 and 2024but more than half of respondents still said they believed DEI was largely a force for good. Tillery points out that a lot of workers appreciate DEI programs, including white employees. When I go in to consult with a company, most of the white male managers say, thank God you’re here. Please teach me how to not insult anyone, he says. They want guidance to not do harm to other people. At companies that remain committed to DEI work, Emerson recommends leaders take a hard look at any initiatives that are costly or need to be retired, such as training programs that use outdated language. Yoshino and his team at the Meltzer Center help companies do a risk analysis of their DEI programs, which involves looking at whether the initiative gives preferential treatment to a protected group that translates to a palpable benefit. The programs that tend to be most risky are fellowships or other initiatives that exclusively cater to a specific groupsuch as women or people of colorwhich is why a number of companies have opened up those programs to all applicants in recent years. Sometimes, however, a program might carry greater legal risks but also benefit a company significantly, which is why Yoshino says its important to analyze DEI efforts on an individual basis before scrapping them altogether. One of the benefits of these risk audits that we’re doing with companies is that they help them identify programs where they’re willing to tolerate some risk, Yoshino says. You need to chart that risk against the impact of the program to see your risk tolerance for each programnot for DEI overall. In 2020, many employers made grand gestures and public proclamations in support of DEI, which drew a lot of attention but may not have yielded tangible results; those types of performative actions can also prove riskier, according to Emerson. Some companies may shift away from representation goals, which many tech giants embraced a decade ago when they first started publishing diversity reports. So many company efforts have been focused on representation, which I think is really important, she says. But we often would see companies focus on representation but not talk about the gaps that were leading to those representation outcomes. In some cases, companies seem to be folding DEI work into other departments. But it could also make sense to expand the remit of teams that were previously structured to focus on DEI, since diversity practices intersect with so many other parts of the business and should be incorporated across the company. If you see that there’s no longer a DEI title at this company, I think that could be bad news, Emerson says. Or it could be that the company is actually very strategically embedding some of this expertise in ways that are going to have more impact on the business. For some employers, moving away from the acronym DEIwhich has become a loaded term and easy target for right-wing conservativesmight seem like the right call. But its also important that leaders find a way to effectively communicate these types of changes to their DEI programs, so employees dont feel like their company has entirely abandoned its commitments to diversity. Right now, companies are really looking for a way to signal to their employees: We care about you, Emerson says. Our values have not changed. We want our workplace to be fair. We want hard work to predict your success, not identity. We want you to feel a sense of belonging hereand to thread the needle and not expose [ourselves] to unnecessary risk.
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E-Commerce
The U.S. labor market probably started 2025 the way it spent most of last year: generating decent, but unspectacular, job growth.When the Labor Department releases January employment numbers Friday, they’re likely to show that companies, government agencies, and nonprofits added 170,000 jobs last month, according to a survey of economists by the data firm FactSet. That would be a respectable performance but also a downshift from 2024, which averaged 186,000 new jobs a month, including a surge of 256,000 in December. The unemployment rate is expected to remain low at 4.1%.The first monthly jobs report of Donald Trump’s second presidency is likely to confirm that he inherited a solid economy, one in which consumers enjoy job security and rising wages that give them the confidence and financial wherewithal to spend freely.“The economy is kicking off 2025 in good shape,” said Bill Adams, chief economist at Comerica Bank.The future is cloudier.A federal judge on Thursday temporarily blocked President Donald Trump’s plan to push out federal workers by offering them financial incentives, yet a federal hiring freeze that Trump imposed January 20 is a “negative for employment growth,” Bradley Saunders, an economist at Capital Economics, wrote in a commentary last week. The freeze came after the Labor Department collected the January jobs numbers, so any impact would be revealed in upcoming employment data.Likewise, a cold snap that probably increased seasonal layoffs in the Midwest and Northeast occurred late in January and won’t register in government jobs data until the February numbers come out, Saunders wrote.Economists are also worried about Trump’s threat to wage a trade war against other countries. He’s already imposed a 10% tax on imports from China.Canada and MexicoAmerica’s two largest trading partnersremain in his crosshairs, though he gave them a 30-day reprieve from the 25% tariffs he was planning to sock them with on Tuesday, allowing time for negotiations. Trump says that America’s two neighbors and allies haven’t done enough to stem the flow of undocumented immigrants and fentanyl into the United States. Trump is also itching to slap tariffs on the European Union; pointing to America’s deficit in the trade of goods with the EU, which came to $236 billion last year, he says that Europe treats U.S. exporters unfairly.The tariffs, which are paid by U.S. importers who generally try to pass along the cost to customers, could rekindle inflationwhich has fallen from the four-decade high it reached in mid-2022 but is still stuck above the Fed’s 2% target. If the tariffs push prices higher, the Fed may cancel or postpone the two interest-rate cuts it had forecast for this year. And that would be bad for economic growth and job creation.The job market has already cooled from the red-hot days of 20212023. American payrolls increased by 2.2 million last year, down from 3 million in 2023, 4.5 million in 2022, and a record 7.2 million in 2021 as the economy roared back from COVID-19 lockdowns. The Labor Department also reports that employers are posting fewer jobs. Monthly job openings have tumbled from a record 12.2 million in March 2022, to 7.6 million in Decemberstill a decent number by historical standards.As the labor market cools, American workers are losing confidence in their ability to find better pay or working conditions by changing jobs. The number of people quitting has fallen from a record 4.5 million near the height of the hiring boom in April 2022, to December’s 3.2 million, which is below pre-pandemic levels.Still, layoffs remain below pre-pandemic levels, creating an unusual situation: If you are employed, you probably enjoy job security. If you’re looking for one, things have gotten tougher.The Labor Department is also expected to report annually released revisions Friday that will show job creation from April 2023 through March 2024 wasn’t as strong as originally reported.A preliminary version of the revisions, released in August, showed that 818,000 fewer jobs were created over those 12 monthslowering average monthly hiring during that span from 242,000 to 174,000. Because they are not final, the August estimates have not yet been added to the official government payroll numbers. The revisions out Friday will become official and part of the historic data. Paul Wiseman, AP Economics Writer
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E-Commerce
OpenAI is scouring the U.S. for sites to build a network of huge data centers to power its artificial intelligence technology, expanding beyond a flagship Texas location and looking across 16 states to accelerate the Stargate project championed by President Donald Trump.The maker of ChatGPT put out a request for proposals for land, electricity, engineers and architects and began visiting locations in Oregon, Pennsylvania, and Wisconsin this week.Trump touted Stargate, a newly formed joint venture between OpenAI, Oracle and Softbank, shortly after returning to the White House last month.The partnership said it is investing $100 billionand eventually up to $500 billionto build large-scale data centers and the energy generation needed to further AI development. Trump called the project a “resounding declaration of confidence in America’s potential” under his new administration, though the first project in Abilene, Texas, has been under construction for months.Elon Musk, a Trump adviser and fierce rival of OpenAI who is in a legal fight with the company and its CEO Sam Altman, has publicly questioned the value of Stargate’s investments.After Trump’s announcement, a number of states reached out to OpenAI about welcoming additional data centers, Chris Lehane, OpenAI’s vice president of global affairs, told reporters Thursday.The company’s request for proposals calls for sites with “proximity to necessary infrastructure including power and water.”AI uses vast amounts of energy, much of which comes from burning fossil fuels, which causes climate change. Data centers also typically draw in large amounts of water for cooling. Some tech giants have started financing nuclear power to plug into their data centers.OpenAI’s proposal makes no mention of whether it intends to prioritize renewable energy sources such as wind or solar to power the data centers. But it says electricity providers should have a plan to manage carbon emissions and water usage.“There’s some sites we’re looking at where we want to help be part of the process that brings new power to that site, either from new gas deployment or other means,” said Keith Heyde, who directs OpenAI’s infrastructure strategy.The first Texas project is in a region Abilene Mayor Weldon Hurt has described to The Associated Press as rich in multiple energy sources, including wind, solar and gas. Also describing it that way is the company that began building the AI data center campus there in Junethe same two “big, beautiful buildings” that Altman showed off in a recent drone video posted on social media.Crusoe CEO Chase Lochmiller said that wind power is central to the project his company is building, though it will also have a gas-fired generator for backup power.“We try to build data centers in locations where we can access low-cost, clean and abundant energy resources,” Lochmiller said. “West Texas really fits that mold where it’s one of the most consistently windy and sunny places in the United States.”Lochmiller said he expects the Trump administration, despite the president’s opposition to wind farms, to be pragmatic in supporting wind-powered data centers when it is “actually the cheapest way to access energy.”Data centers consumed about 4.4% of all U.S. electricity in 2023 and that’s expected to increase to 6.7% to 12% of total U.S. electricity by 2028, according to the Lawrence Berkeley National Laboratory.The other states where OpenAI is actively looking include Arizona, California, Florida, Louisiana, Maryland, Nevada, New York, Ohio, Utah, Virginia, Washington, and West Virginia. Heyde said the company only plans to build “somewhere between five to 10” campuses in total, depending on how large each one is.OpenAI previously relied on business partner Microsoft for its computing needs. But the two companies recently amended their partnership to enable OpenAI to pursue data center development on its own.-Associated Press writer Jamey Keaten contributed to this report.-The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP’s text archives. Matt O’Brien, AP Technology Writer
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E-Commerce
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