Small Business Owners in United States Faced With Making Painful, Personal Layoffs

By Sierra Campbell, Managing Editor of small.news

(small.news) — Small business owners in the United States are dealing with more layoffs as the holidays approach, and according to ADP, companies with fewer than 50 employees let go of 120,000 employees in November alone.

This all comes during the most crucial time for small businesses across the country: the Holiday Season.

According to NBC News, ADP’s chief economist Nela Richardson said, “The labor market is not weak but it is weakening, and the first to crack is small establishments.” She also said that a lot of this pressure is due to high inflation, consumer spending wavering, President Donald Trump’s tariffs, and broader uncertainty in the economy.

However, the data doesn’t show the whole story, according to NBC News. Many small business owners are needing to layoff employees who they’ve known and loved for a long time.

Some Small Business Owners Making More Subtle Decisions: ADP

Even though small businesses laid off many workers in November, some are trying other tactics, like putting a pause on all new hiring and not replacing workers who leave. Richardson explained, “Those little changes at the margin are actually adding up.”

Hanna Scholz is the president of Bike Friday, which makes custom bikes in Eugene, Oregon, and she said they haven’t had to lay anyone off yet. However, they had three employees leave in 2025 due to health reasons. Scholz decided not to replace those three employees, and said that her primary reason for that was consumer demand being weaker.

She also said that she is seeing American consumers slowing down on spending as the cost of living gets higher. “If there’s uncertainty, it’s normal human behavior to slow down big purchase decisions… And bikes are not seen as totally essential,” Scholz explained.

Consumer Confidence Fell in November: Survey

According to The Conference Board, consumer confidence fell immensely in November. The company’s Consumer Confidence Index declined by 6.8 points to 88.7, which is the lowest it has been since April, according to Chief Economist Dana M Peterson.

“Consumers were notably more pessimistic about business conditions six months from now. Mid-2026 expectations for labor market conditions remained decidedly negative, and expectations for increased household incomes shrunk dramatically, after six months of strongly positive readings,” Peterson explained.

Peterson went on to say, “Consumers’ write-in responses pertaining to factors affecting the economy continued to be led by references to prices and inflation, tariffs and trade, and politics, with increased mentions of the federal government shutdown… The overall tone from November write-ins was slightly more negative than in October.”

Scholz told NBC News that not replacing those three employees who left helped her offset some of the negatives from weaker customer demand in the United States. She did say, however, that “it shows the bleeding.”

Costs for Small Businesses in United States Soaring

NBC News also spoke with the owner of Down to Earth Living in Ponoma, New York, Stuart Leventhal. He told the outlet that he is also dealing with lower customer demand. Leventhal explained that consumers have been more cautious about their shopping decisions. And even though they are are still purchasing, they are often buying less.

Leventhal said that he’s taken around a 10% cut in the business’ profitability in 2025, but he did it because he wanted to hold on to his longtime employees. “We’re a good employer and we like to protect our people,” he explained.

Now, Down to Earth Living is also dealing with a cost that wasn’t a problem in 2024: Added tariff costs for its inventory, which is mostly imported. Instead of putting this cost on their customer base, they take the hit.

However, Leventhal said, “We can’t take much more than we’re absorbing now.”

Another small business, Malicious Women in Snohomish, Washington, is also dealing with the costs of imported goods rising. Owner Lacie Carroll-Marsh explained that her candle jars and packaging are imported from Taiwan, and now, they cost 20% more because of the tariffs.

And even though her wax is produced in the U.S., she claims that she is paying almost 12% more than she did in 2024. One distributor told Carroll-Marsh that part of the reason for this is because of a labor shortage on soy farms caused by the recent deportations of immigrant workers.

Tough Choices Being Made: ‘There’s Tears on Both Sides’

Carroll-Marsh has owned her small business, Malicious Women, since 2017, but this year, she has had to lay off 17 of her 31 employees. “Most of my employees have been with me five, six, seven years… I know their kids. We’ve gone camping together. We have Christmases together. And it hurts. There’s tears on both sides.”

She told NBC News that her employees are paid an average of $24 an hour, but some can make up to $30 an hour, and she doesn’t want to change that.

“In order to get good employees and keep good employees, we have to pay them.” — Lacie Carroll-Marsh, Owner of Malicious Women

Carroll-Marsh also has to worry about the health insurance costs, and she believes the cost to cover her employees is going to be “completely out of reach” in 2026. When February rolls around, her monthly contribution per employee is going to go from $728 to $1,400.

If her sales don’t increase immensely, she is worried she will have to lay off three more employees. “We are on a skeleton crew. Every single member of my retail team is working at the warehouse,” she explained.

United States Policymakers, Advocacy Groups Blaming One Another: Report

Despite small businesses across the country struggling, advocacy groups and policymakers in Washington, DC, have been blaming one another.

The Main Street Alliance, for example, said that President Trump and Republicans are responsible for these conditions. Richard Trent, the executive director, told NBC News, “Trade wars, health care cuts, and tax breaks for big corporations have left Main Street businesses struggling to hire and grow.”

On the other end, The White House and the Trump administration claim this is temporary. White House spokeswoman Taylor Rogers said, “President Trump promised to bring prosperity back to Main Street with an American First agenda that benefits every small business, just as he did in his first term.”