The Fall of DEI in Corporate America: How Culture Can Take the Lead

By Aldo Quevedo, CEO, BeautifulBeast

As professionals in the Hispanic market industry, we believe it’s important to share our perspective on this critical issue and provide practical recommendations to clients and the industry as a whole.

In the wake of the social justice movements of the 2020s, corporations across America embraced Diversity, Equity, and Inclusion (DEI) programs as both a moral imperative and a strategic business priority. These initiatives promised to amplify underrepresented voices, foster equitable opportunities, and build stronger connections with diverse consumers. DEI was no longer just a buzzword; it became embedded in hiring practices, product development, and even marketing strategies.

However, DEI initiatives have become victims of changing corporate priorities in recent years. As economic and political pressures increase, many companies are reducing or completely eliminating their DEI programs. These choices are often presented as budgetary necessities, but they indicate a more profound cultural shift.

The First Domino: Shrinking Budgets for Multicultural Marketing

One of the first and most noticeable effects of DEI’s decline is the reduction of budgets for multicultural marketing. DEI programs often served as internal advocates for efforts directed to Hispanic, Black, and other underrepresented audiences. These programs secured resources by highlighting the significance of cultural representation at the corporate level, and also in advertising strategies, emphasizing the impressive return on investment these demographics offer to their businesses.

According to Arizona State University, the Hispanic market commands over $3.2 trillion in spending power and continues to grow in size and influence. However, without an internal champion for these initiatives, brands risk underinvesting in this demographic and missing significant revenue opportunities. Research from the Hispanic Marketing Council and others shows that culturally relevant campaigns result in higher engagement and stronger brand loyalty. If brands deprioritize this vital audience, agencies will be left scrambling to justify their work and secure client funding.

Cultural Connection at Risk: From Purpose to Performance

The balance between purpose-driven and performance-driven marketing is also at risk. Many successful campaigns aimed at multicultural audiences rely on authentic cultural storytelling to connect emotionally with consumers. This shift threatens to erode the trust and authenticity that purpose-driven marketing has built over the years. Like all audiences, Hispanic consumers can sense when a campaign is transactional instead of relational. Agencies must strive to maintain the storytelling element of their work to preserve long-term brand equity and consumer loyalty.

The Talent Pipeline Problem

DEI programs were also instrumental in recruiting, developing, and retaining diverse talent within corporations. These initiatives created pathways for Hispanic creatives, strategists, and executives to thrive in environments that historically underrepresented them.

Without diverse teams shaping business strategies, creative campaigns may lack authenticity, leading to cultural missteps or generic marketing that fails to connect. This is not hypothetical. In the last five years, we have seen numerous examples of messages missing the cultural mark from brands using the “Total Market” approach, or more recently, where it’s clear that no one with multicultural expertise was involved.

The Way Forward: Redefining the Value of DEI

While the death of corporate DEI programs presents challenges, it also opens the door for advertising agencies to redefine and lead the conversation. Here are actionable strategies agencies can adopt:

1. Prove the Business Case: Present data-driven evidence of the Hispanic market’s economic influence to convince clients that investing in multicultural marketing is a smart business decision, not just a moral one.
2. Leverage Culturally Informed Storytelling: Demonstrate how authentic, culturally resonant campaigns drive both emotional engagement and measurable business outcomes, using successful case studies to back up these claims.
3. Invest in Internal DEI Efforts: Maintain strong hiring, mentorship, and talent development practices to ensure diverse perspectives continue shaping creative strategies and campaigns.

A New Leadership Role for Agencies

Hispanic-focused agencies have always had the unique opportunity to rise as cultural leaders. By championing the value of authenticity and demonstrating the tangible business impact of reaching diverse audiences, these agencies can fill the void left by corporate retrenchment. The challenge now is not just to respond but to lead—crafting campaigns that celebrate culture, foster inclusion, and drive meaningful connections with the Hispanic community.

The dissolvement of DEI may signal the end of a chapter, but it also marks the beginning of a new era when those who understand the power of culture can shape the future of advertising and business. Now is the time for agencies to step up, prove their worth, and position themselves as indispensable business partners in building a more inclusive and prosperous marketplace.

In the words of Alicia Keys, “DEI is not a threat; it’s a gift.”