SBA Extends the Time for Employees to Accept Deferred Resignation Program while Continuing to Reduce its Workforce by 43 Percent—Whose Positions and Salaries May Be Targeted

The Deferred Resignation Program (DRP) is again being offered at SBA and DRP will be open until April 7, 2025. According to reports, an email was sent out at 5:45 a.m. Saturday in which SBA wrote that “For avoidance of doubt, acceptance of your DRP will be subject to SBA’s approval at its discretion, to ensure continuity of business operations as the agency thoughtfully executes the planned strategic reorganization.”

 This follows SBA’s March 21, 2025, announcement of its structural reorganization to reduce its workforce by 43 percent and have/move 30 percent of its workforce in the field to assist small businesses. SBA cited that the average salary of the SBA employee is over $132,000—more than double the national average wage and is expected to save more than $435 million annually in its reduction. https://www.sba.gov/article/2025/03/21/small-business-administration-announces-agency-wide-reorganization

 Also recall that on January 20, 2025, an Executive Order was issued entitled “Restoring Accountability for Career Senior Executives” that, along with certain directives, took aim at what it found to be unusually high scores of performances for what was deemed as lackluster performances by career executives—accompanied by increases in compensation. One of the main functions of the EO was to reinvigorate and/or reassign government career executives through accountability and transparency via performance reviews. https://www.whitehouse.gov/presidential-actions/2025/01/restoring-accountability-for-career-senior-executives/

 As this Administration looks to move agency operations, including the highest-level executives, either away from a concentration in DC or towards retirement or resignation no doubt there is an active evaluation of salaries in play. In 2022, the OPM data and compilations indicated that the average salary and bonus at SBA $188,121.61, with the Total Pay of $18.81M. This higher level of compensation concentration is mostly seen at headquarters and at the upper level positions. Not until employee number 30 is reached does the compensation barely dip below $200,000 and all but two in that 30 appear to be located outside of DC. https://www.federalpay.org/employees/small-business-administration/top-100/2022 (derived from OPM data). With SBA looking to reduce the workforce by 43 percent and offering DRP, it will eliminate approximately 2700 active positions out of 6500—and many relocations outside of DC to the field offices. https://www.sba.gov/article/2025/03/21/small-business-administration-announces-agency-wide-reorganization

 SBA is undoubtedly looking to reduce the concentration of highly compensated individuals headquartered in DC and “refocus” its efforts towards servicing businesses in the field. As Administrator Loeffler stated “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. Instead of serving small businesses, the SBA served a partisan political agenda – expanding in size, scope, and spending.” She went on to state “We will return our focus to driving private sector growth and delivering disaster relief with accountability, efficiency, and results.” https://www.sba.gov/article/2025/03/21/small-business-administration-announces-agency-wide-reorganization

 More to come as developments progress.