About 2,700 staff positions in the Small Business Administration will be phased out under an agency-wide reorganization. The workforce reduction, estimated at 43 percent of SBA’s estimated 6,500 employees, will generate over $436 million annual savings by 2026, the agency said in a statement Friday.
According to Kelly Loeffler, SBA administrator, the agency has doubled in size during the last four years, becoming an arm for “a partisan political agenda” under the previous administration and losing track of SBA’s goal of providing small businesses access to capital.
“We have therefore submitted plans to pursue a strategic restructuring that will realign the agency and its resources with our founding mission,” the SBA head explained. She added that the planned manpower reduction will be pursued by eliminating non-mission critical positions while consolidating some functions.
The workforce reduction also includes voluntary resignations, expiring term appointments and redundant functions, such as the positions created for processing Covid-era loans, SBA noted in its announcement.
Strengthening Oversight, Disaster Relief Functions
The agency’s accountability offices, including the Office of Advocacy and the Office of the Inspector General, are exempted from the manpower reduction. Current staffing levels with the Office of Veterans Business Development and the Office of Manufacturing and Trade will also be maintained to sustain SBA support for veteran businesses and U.S. manufacturing.
SBA also noted that its loan guarantee and disaster assistance services, along with other core programs, will not be affected by the reorganization and manpower reduction. Instead, personnel will be added to the agency’s Office of Disaster Recovery and Resilience to expand the office’s disaster loan processing operations. Cross-training of field office personnel will be undertaken to further enhance disaster recovery support.
In addition, the agency will decentralize its services and ensure that field operations deliver 30 percent of its services. Meanwhile, the revamp intends to centralize risk management and fraud prevention within the Office of the Chief Financial Officer to prioritize oversight on the integrity of the agency’s programs and funding.
In March 2024, the House Committee on Small Business conducted a hearing on reducing SBA mismanagement, following the Government Accountability Office’s findings and recommendations on fraudulent Covid-19 loans that the agency had extended.
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