The U.S. Small Business Administration (SBA) announced an agencywide restructuring on March 21, 2025, that will cut its workforce by 43%, eliminating approximately 2,700 positions. This significant reduction aims to realign the agency with its founding mission of empowering small businesses and restoring accountability to taxpayers.
SBA Administrator Kelly Loeffler emphasized that core services will remain intact. Programs related to loan guarantees, disaster assistance, and support for veterans will not be affected. She stated, "Just like the small business owners we support, we must do more with less. We have therefore submitted plans to pursue a strategic restructuring that will realign the agency and its resources with our founding mission. We will return our focus to driving private sector growth and delivering disaster relief with accountability, efficiency, and results.”
According to the SBA, the cuts will produce a substantial savings of over $435 million annually by Fiscal Year 2026. The drastic workforce reduction signals a shift back to staffing levels seen during the first Trump administration, addressing what Loeffler described as the agency's harmful “mission creep” that occurred under the previous administration. The SBA had expanded its workforce nearly doubled during the pandemic due to initiatives like the Paycheck Protection Program (PPP) designed to help small businesses survive.
“The SBA was created to be a launchpad for America’s small businesses by offering access to capital, which in turn drives job creation, innovation, and a thriving Main Street,” Loeffler explained. “But in the last four years, the agency has veered off track – doubling in size and turning into a sprawling leviathan plagued by mission creep, financial mismanagement, and waste.”
The agency's overhaul directly stems from President Donald Trump's executive order implementing the Department of Government Efficiency (DOGE) initiative, aimed at reducing the federal workforce. Under the new plan, approximately 30% of SBA staff will be located in field offices to better serve small business owners across America.
Key features of this reorganization also include a renewed focus on risk management, fraud prevention, and the expansion of disaster response support. Loeffler outlined that the restructuring aims to create a more dynamic agency better equipped to promote small businesses, innovation, and job creation.
“The SBA's expanded resources will ensure timely disaster relief and support for veteran business owners,” Loeffler added during a recent press conference. “By eliminating non-mission-critical positions and consolidating functions, we will revert to the staffing levels of the last Trump administration, which supported a historic economic boom.”
The cuts will occur through voluntary resignations and the expiration of COVID-era appointments, alongside a limited number of reductions in force (RIFs). The SBA's average employee salary exceeds $132,000, significantly higher than the national average. Thus, the agency's strategic restructuring is seen as a necessary action to mitigate waste and restore organizational integrity.
The SBA will remain exempting key accountability offices from immediate reductions to preserve oversight functions. Internal audits have revealed that an estimated $200 billion in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) fraud cases were previously overlooked.
The decision to focus the SBA back to its roots as a facilitator of small business loans and support is met with a mixed reception. Proponents argue that the changes will help streamline functions and eliminate inefficiencies, while critics express concern about potential negative impacts on services designed to enhance the support system for small businesses.
While the SBA is poised for a significant transformation, the broader implications of this restructure will likely unfold in the coming months. As the agency sheds excess baggage and focuses on its core missions, small businesses await the outcomes of these initiatives, hoping for a revival of support that empowers entrepreneurship and economic growth.
Ultimately, as the SBA aligns more closely with its original mandate, stakeholders from across the spectrum will be watching closely to see if this new approach can truly drive the desired results for small businesses across the nation.
