Target Ditching DEI Cost The CEO His Job And Investors $12 Billion

NEW YORK, NY – NOVEMBER 28: Target CEO Brian Cornell (C) appears on CNBC after ringing the opening bell at the New York Stock Exchange on the morning of November 28, 2014 in New York City. The Friday after Thanksgiving, also known as Black Friday, traditionally marks the beginning of the Holiday season. (Photo by Andrew Burton/Getty Images)

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Yesterday Target announced their CEO, Brian Cornell, would be stepping down after 11 years, much of the story surrounded their decline in sales, highlighted their decreasing foot traffic, or focused on the 19% decrease in profit.

And while those factors are all correct, they represent more of the ‘what’ vs taking a deeper look at ‘why’.

It’s essential to be clear as to why this is happening to Target.

Target, which has been beloved by so many across the country and throughout the world, had built itself up as a fun, inclusive contemporary retailer that people looked forward to as a destination to shop for goods, many of which are considered discretionary by its customers.

It was one strategic decision this past January that unraveled years of investment, brand trust, built-up reputation, and consumer loyalty.

They eliminated DEI.

While they say they concluded, rolled back, stopped or evolved their Belonging, consumers saw it differently – and the results have been catastrophic.

Target’s Growth Was Built On DEI, Then They Cut It

Upon arriving at the White House on January 20, President Trump wasted no time before issuing a January 21st executive order titled “Ending Discrimination and Restoring Merit-Based Opportunity“. In that order he addressed DEI initiatives in the public and private sector, describing them as “dangerous, demeaning and immoral,” that they “violate the text and spirit of our longstanding federal civil-rights laws” and further said that DEI programs “undermine our national unity, as they deny, discredit and undermine the traditional American values of hard work, excellence and individual achievement in favor of an unlawful, corrosive and pernicious identity-based spoils system.”

Three days later on January 24, Target announced that they were rolling back their DEI programs in a memo to employees written by Kiera Fernandez, chief community impact and equity officer at Target. “Many years of data, insights, listening and learning have been shaping this next chapter in our strategy,” she said in the memo. “And as a retailer that serves millions of consumers every day, we understand the importance of staying in step with the evolving external landscape, now and in the future – all in service of driving Target’s growth and winning together.”

It was only four years earlier, in the wake of George Floyd’s murder which happened in Target’s home state of Minnesota, that Cornell had been very vocal about the brands need to do more “I recognize that it’s time to take it to another level, and that as CEOs, we have to be the company’s head of diversity and inclusion,” he said. “We have to be the role models that drive change and our voice is important. And we’ve got to make sure that we represent our company principles, our values, our company purpose on the issues that are important to our teams.”

He pledged to increase black employee representation by 20% and committed to spend over $2 Billion with black ownedbusinesses. He said he would create a program based on Target Accelerators, called Forward Founders for early-stage start-ups led by Black entrepreneurs to help them develop, test and scale products so one day they could be in Target, and touted the fact that they have over 50 Black-owned and Black-founded brands on their shelves in store and online, before stating he wanted to do more.

The result: In 2021, comparable sales grew by 12.7%, on top of record growth in 2020. The company and brand were thriving. Target’s market value soared to $129 Billion.

It was clear that their strategy, communication and evolution to tie into broader market opportunities surrounding diversity, equity and inclusion was changing the company. To be clear, DEI was very, very good for business.

DEI worked so well for the retailer that Cornell had his contract extended for three more years by the company’s board of directors in September 2022, bypassing Target’s policy requiring its chief executives to retire at the age of 65. At the time, Cornell was 66.

Killing DEI Hurt Target’s Business, Value & The CEO’s Job

Soon after Target announced it was rolling back its DEI programs on January 24, 2025, problems started to appear. In February the backlash began among consumers they had recently gone out of their way to embrace. In March, sales were reported as being “soft”. And it was with that hint of decline, and momentum building, that Pastor Jamal Bryant launched TargetFast.org, calling on 100,000 conscientious citizens to fast from spending any money at Target for the 40 days of Lent, beginning Wednesday, March 5, and concluding on April 20 (Easter Sunday). Over 200,000 participants stepped up, far surpassing the participation goal. It was a boycott by a different name.

From there, LatinoFreeze.com came to light, bringing a similar message to their cultural community. According to data from Placer.ai, for the week the boycott started, foot traffic fell 6.8% year over year at Target stores, and coincided with the timing of the 40-day “fast.”

Beyond consumers, the family of one of Target’s cofounders has become vocal, telling the Los Angeles Times they’realarmed by the recent decision, saying “It is not ‘illegal’ for a company to create a business model based on what it believes to be important ethical and business standards.” And online, in a Target subreddit that has been around since 2010, employees are expressing their frustration too. (It should be noted that the group isn’t affiliated with or endorsed by the company.)

It was at this point the markets began to take notice. Target’s stock price (NYSE: TGT) decreased 24%—from 137.40 on January 24, the day Target cut its programs, to 104.70 on March 15. To top it off, the City of Riviera Beach Police Pension Fund filed a class-action lawsuit against Target, its CEO, and board members, claiming they misled investors about the financial risks of Target’s DEI and Environmental, Social, and Governance initiatives. The plaintiffs are alleging that Target downplayed the dangers of consumer backlash and boycotts stemming from the changes.

Target’s Value Is Down 65% Since 2021, As Is Trust

While the broader market is up significantly since 2021, Target has continued to go in the opposite direction. Target’svalue is now at $45 Billion, down from $129 Billion, as brand trust is eroding. Their stock price (NYSE: TGT) is down to $96.40.

Target’s brand’s differentiation wasn’t just about products or pricing—it was about the trust and emotional connection customers feel based on what Target stood for in 2020. Almost overnight, they chose to change their tune, and made it appear as if their values and investment into diversity were negotiable. The result was that consumer trust eroded faster than any quarterly gains could offset.

All of this was preventable.

Now The Real Work Begins.

Target must not only restore growth, but it must also rebuild confidence by showing consistency between its values and its actions.

Trust these days is not a luxury; it’s a strategic asset. And one you can’t put a price tag on. It’s built over time, every single day with consistent actions that reinforce their corporate values – not found in a spreadsheet.

Target’s growth was accelerated by investing in diversity, and thier demise has been due to them abandoning it.

While outside forces are calling for the biggest companies to “kill DEI” and destroy the “woke policies of the left”, CEO’sneed to realize that growth is in new markets and building bridges and messages to new audiences.

The people who are so quick to take down DEI are growing their 401(k) savings accounts off the backs of what DEI is delivering.

Diversity is, and always will be, an emerging market.

And it’s not just a U.S. issue—it’s a global issue. Having traveled to 40 countries to study how diversity within different markets can help grow and sustain business, I can assure you that diversity is a trillion dollar blindspot.

And for Target, they let it slip away.