President Donald Trump and Department of Government Efficiency (DOGE) head Elon Musk continued their federal layoff plans on Friday with new job cuts announced. The Small Business Administration (SBA) has revealed that it will cut 43% of its workforce to right-size the agency. With 6,500 workers, these job cuts will affect 2,795 government employees.
The decision to cut jobs at the SBA is due to its growing size since the COVID-19 pandemic. This led to the organization doubling in size. SBA head Sen. Kelly Loeffler said this has made the agency inefficient and has wasted millions of dollars. Estimates suggest the job cuts will save the government $435 million a year.
How Will This Affect SBA Programs?
Even with layoffs affecting 43% of SBA employees, many of its programs will remain unaffected. The agency said core services, including “loan guarantee and disaster assistance programs, as well as its field and veteran operations,” won’t be impacted by the job cuts.
The SBA also said this change will help promote small businesses. This is part of a wider effort by President Trump to reduce federal bureaucracy and shrink the government. The SBA will also take over the management of federal student loans as the Trump administration largely dismantles the Department of Education.
What This Means for the Stock Market
While the SBA doesn’t directly interact with the stock market, its policies do help shape the U.S. economy. Easing restrictions and less oversight could help boost small businesses, which would be a boon to the economy as recession fears mount.
Investors betting on the economy to bounce back will want to take stakes in exchange-traded funds that track the major indices. Some popular ones are SPDR S&P 500 ETF Trust (SPY), Invesco QQQ Trust (QQQ), and SPDR Dow Jones Industrial Average ETF Trust (DIA).
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