SBA announces 43% workforce reduction, refocusing on core missions

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The Small Business Administration (SBA), under Administrator Kelly Loeffler, has initiated a significant reorganization plan aimed at streamlining operations and reducing government expenditure. This plan includes a 43% reduction in the SBA’s workforce, equating to approximately 2,700 positions out of a total of nearly 6,500 employees.

Details of the reorganization include:

  • Staff reductions: The workforce reduction will be achieved through a combination of voluntary resignations, the expiration of term appointments, and a limited number of reductions in force (RIFs).

  • Focus on core missions: The SBA plans to concentrate its efforts on essential services, including loan guarantees, disaster assistance, field operations, and support for veteran entrepreneurs. Non-essential roles and programs initiated during the previous administration, particularly those related to diversity, equity, inclusion, and COVID-19 relief efforts, will be eliminated.

  • Financial impact: The reduction in staff is projected to save taxpayers more than $435 million annually by fiscal year 2026.

In addition to workforce reductions, the SBA will assume responsibility for managing the federal student loan portfolio, which exceeds $1.7 trillion. This transition involves transferring duties from the Department of Education to the SBA, with the aim of leveraging the agency’s expertise in loan servicing. However, this move has raised concerns about potential service disruptions and the SBA’s capacity to handle such a complex portfolio.

Sources:

https://www.apnews.com/article/sba-announces-major-reorganization

https://www.politico.com/news/2025/03/21/sba-reorganization

https://www.businessinsider.com/sba-student-loan-management-transition