Addressing Declines in Trust & Psychological Safety: 2026 Workplace Culture Trends, Part Two

The cultural momentum of 2025 wasn’t just defined by economic uncertainty or rapid technological change—it was also a year of retreat. Many organizations significantly rolled back or dismantled their DEI (Diversity, Equity & Inclusion) programs, and that retreat is leaving a real and measurable gap in psychological safety.

Employees are reporting that they feel less supported, less recognized, and increasingly unsure of where they belong. This decline in trust isn’t just a “soft” loss—it has tangible impacts on engagement, retention, and the sense of belonging that underrepresented employees rely on.

The Fallout from Rolling Back DEI
1. Widespread Cuts, Real Consequences

• According to a survey of nearly 1,000 companies, 1 in 5 firms have eliminated DEI programs altogether.
• Among those that cut DEI, 57% report hiring fewer employees from underrepresented groups, and 36% say it’s harder to retain diverse talent.
• Nearly half of companies that scaled back report a drop in staff morale, while a significant number report increased bias or discrimination incidents.

2. Risk & Reputation on the Line

• According to a Catalyst and NYU Law study, over 80% of C-suite executives say reducing DEI efforts raises legal, financial, and reputational risks.
• The same study found that 76% of employees (and 86% of Gen Z) are more likely to stay at a company that supports DEI; some younger workers say they wouldn’t even apply to a company that doesn’t.

3. Confusion and Alienation Among Employees

• When organizations quietly dismantle DEI structures—removing language from annual reports or dismantling diversity offices—employees can be left confused about whether the core commitment to inclusion still holds.
• For LGBTQ+ employees, in particular, the rollback hits hard. According to the Human Rights Campaign, many feel excluded when the structures that supported them—like ERGs or inclusive policies—are weakened.
• Some employees report that removing or de-emphasizing DEI sends a message that “diverse perspectives aren’t truly valued,” fueling a sense of erasure or abandonment.

4. Disproportionate Impact on Marginalized Identities

• Studies show that underrepresented identity groups—whether based on race, gender, sexual orientation, or disability—often rely on DEI structures for belonging, advocacy, and systemic support.
• In technology and software sectors, researchers are documenting persistent disparities: DEI backlash correlates with increased anxiety, microaggressions, and isolation among women, people of color, and neurodivergent or disabled employees.
• For intersectional identities (e.g., queer people of color), the removal of DEI can mean losing dual (or more) support systems—including both employee resource groups and policy protections—that are critical for psychological safety.

Why a Wellness Program Matters (Now More Than Ever)
Wellness initiatives can’t just be perks or “nice to haves” when DEI is under threat or just plain erased. They must act as a bold, trust-building foundation to repair eroded psychological safety.

Here’s how:
1. Confidential Mental Health Services
When DEI structures disappear, many employees lose safe channels for support. Confidential counseling offers a protected space for people from all identities to process stress, anxiety, or trauma without fear.
2. Identity-Affirming, Judgment-Free Support
Wellness programs can explicitly welcome conversations about race, gender, sexuality, disability, and other identities. Trained practitioners can ensure people feel seen, understood, and validated.
3. Social Services & Resource Navigation
Many employees feel that DEI cuts also remove access to essential resources (e.g., affinity groups, mentoring, pay-equity tools). Wellness teams can fill in the gaps—connecting employees to legal, financial, and community supports.
4. Manager Training That Teaches Empathy, Not Avoidance
Without DEI, managers may not have frameworks to understand microaggressions, bias, or hidden identity stress. Training focused on empathic leadership helps them listen, validate, and act—not ignore.
5. Clear Privacy Protections
For trust to rebuild, employees need assurance that disclosing personal challenges or seeking support won’t jeopardize their career. Wellness programs must guarantee confidentiality and enforce strong data protections.

The Stakes Are High — for People and for Business

• When psychological safety deteriorates, companies risk losing the very talent they once prioritized. As the Catalyst study showed, many younger and underrepresented workers are more likely to leave without a stable inclusion foundation.
• On the flip side, when wellness programs address these DEI-related trust gaps, they don’t just support individuals—they signal a values-aligned commitment to inclusion and care, even in turbulent times.
• Investing in wellness is also risk mitigation: supporting employees from marginalized identities reduces the chance of legal exposure, reputational damage, and disengagement.

Moving Forward.
The rollback of DEI is more than a budgetary move—it’s reshaping how people experience belonging, safety, and identity at work. Without proactive support, organizations risk eroding the trust and psychological foundation that enables innovation, engagement, and growth.

A deeply considered wellness program isn’t just a response—it’s the infrastructure for healing, rebuilding, and re-committing to humanity in the workplace.

​Wellness leaders, HR teams, and executives: if you’re not integrating psychological safety through wellness, you’re leaving too much to chance. In 2026, the companies that center care will be the ones that not only survive, but transform.