Small Business Layoffs Are Surging

The layoff rate among businesses with one to nine employees has more than doubled.

Good Morning!

Here are today’s highlights:            

• Ami Kassar says the SBA has a branding problem.

• A slew of owners in Portland thought they were being saved by private equity.

• In Denver, businesses are feeling squeezed by the rising minimum wage.

• On the 21 Hats Sounding Board: If you have remote employees, do you cover their cell-phone plan? Their cell-phone purchase? Their internet?

HUMAN RESOURCES

Layoffs at small businesses are surging: “New data from the Bureau of Labor Statistics found while the overall 1.1 percent layoff rate in July was up slightly from the 1 percent rate recorded the previous month, there was a big disparity in layoff activities, depending on business size. Small businesses are now the ones more likely to be cutting workers while bigger businesses are holding onto them or even adding employees. The layoff rate among small businesses with one to nine employees more than doubled, from 0.9 percent at the end of June to 2 percent at the end of July, according to the BLS. That is also up substantially from the same time last year, when businesses of that size had a 1.5 percent layoff rate.”

• “Small businesses with 10 to 49 employees saw layoffs grow from 0.9 percent in June to 1.2 percent in July — up from 1.1 percent in July 2023. But the layoff rate among businesses with 50 to 249 employees dropped from 1.2 percent to 0.9 percent between June and July. Businesses with 250 to 999 employees held steady, at 1.3 percent, in that time frame.”

• “‘The smallest businesses are often the most vulnerable to economic turbulence, whether in the form of higher input costs or higher interest rates,’ said Elizabeth Renter, senior economist at NerdWallet, in an email. ‘A surge of new businesses since the pandemic means there are more of these small, new businesses.’” READ MORE