Target is facing the harsh reality that actions have consequences after ending their DEI initiatives.
The retailer is currently being sued for allegedly hiding the risks of ending the company’s DEI (diversity, equity, and inclusion) programs after customers angry about the move started a boycott.
Last month, Target joined major corporations across the country who have been rolling back diversity initiatives in the wake of President Donald Trump taking power. The company also issued a memo that said it would end its Racial Equity Action and Change program and will be “stopping all external diversity-focused surveys including HRC’s Corporate Equality index,” the Advocate reports.
The backlash to the move was swift, with civil rights activists and people across social media calling for a boycott. Georgia pastor Dr. Jamal Bryan even told his congregation that they should participate in a “40-day fast from Target.”
Now, the mega-store is realizing that while ditching diversity programs may win over Republicans, there are also very real consequences.
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Target shareholders, led by the City of Riviera Beach Police Pension Fund in Florida, filed a class action lawsuit, claiming Target defrauding them by “artificially inflated” stock prices and failing to warn inventors about how removing DEI and ESG (environmental, social, and governance) policies could cause stock prices to plummet, Forbes reports.
The lawsuit also says that Target concealed the backlash it suffered from the May 2023 Pride Month campaign after the company removed the LGBTQ+ merchandise after confrontations happened in stores.
Target lost $15.7 billion of market value after share prices fell 22% on Nov. 20, 2024.
The lawsuit was filed after January 24, when Target announced it was ending its DEI initiatives. This move walked back the company’s commitment to diversity that increased after the police killing of George Floyd in 2020 when the retailer created a program to support Black businesses.
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