Federal job cuts continue at the Small Business Administration
The Small Business Administration (SBA) has announced layoffs at its COVID-19 Economic Injury Disaster Loan Servicing Centre (CESC), despite taking on the $1.7 trillion student loan portfolio from the Education Department.
According to reports, the SBA's CESC, established to help small businesses recover from the economic impacts of the COVID-19 pandemic, will see a reduction in staff. The SBA Administrator, Kelly Loeffler, announced a reorganization plan on March 21, 2021, which called for the elimination of 2,700 active positions from a total workforce of around 6,500.
The email sent to employees thanked them for their service to the agency and for their efforts in assisting the SBA in fulfilling its mission. However, it also announced the layoffs, which are effective from May 16, 2021, with some employees being terminated earlier on May 2.
The email shared with Government Executive further stated that human resources and information technology personnel will assist with the offboarding process and answer questions. It's unclear at this time what the impact of the layoffs will be on the operations of the CESC and the overall mission of the SBA.
Prior to the layoffs, staff who accepted the deferred resignation option in late March were bid farewell. It's worth noting that the SBA employee who spoke to Government Executive expressed confusion about the layoffs, as they are also supposed to be handling student loans.
The reorganization plan signals massive changes at the SBA, with the aim to optimize workforce efficiency by retaining higher performers and eliminating positions that do not align with the agency's current priorities or performance standards. The SBA has stated that the layoffs are not primarily due to workload volume but rather common management practices to adapt personnel in response to changing operational demands.
Despite requests for comment, the SBA has not yet responded regarding the layoffs. The CESC office employs more than 1,200 people, though it's unclear if every staff member will be affected by the layoffs.
The SBA employee also stated that they made money for the government by taking loan payments and recovering money in bankruptcy. This suggests that the CESC has played a crucial role in helping the SBA generate revenue during the pandemic.
As the SBA continues to navigate the economic recovery, it remains to be seen how these layoffs will affect the agency's ability to support small businesses and manage the student loan portfolio.
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