Small Businesses Keep Getting Smaller In Big Wave Of Downsizing

By Mish Shedlock of MishTalk

Thursday, September 25, 2025 3:20 PM EDT

Data is via a download from the Quarterly Census of Employment and Wages (QCEW) release for 2025 Q1.

Business Expansion Highlights

The change in the number of businesses with 5 or more employees from 2021 to 2022 was 137,016.
The change in the number of businesses with 5 or more employees from 2024 to 2025 was 2,617
Of the total change in the number of businesses from 2024 Q1 to 2025 Q1, firms with fewer that 5 employees accounted for 337,890 of the total increase of 340,507 firms.
In2025, firms fewer than 5 accounted for 99.2 percent of the increase in the total number of firms.
In2022, firms fewer than 5 accounted for only 77.8 percent of the increase in the total number of firms.

Changes in Number of Businesses Detail

(Click on image to enlarge)

Changes in Number of Businesses by Number of Employees

5 to 9: 3,468
10 to 19: 1,862
20 to 49: -2,348
50 to 99: -741
100 to 249: 197
250 to 499: 4
500-999: 46
1000+: 129

Major Changes

The number of businesses with 50-99 employees decreased by 741.

The number of businesses with 20-49 employees decreased by a whopping 2,340.

The chart shows those drops are due to downsizing, not upsizing.

However, the very largest firms did get bigger, likely pushing a number of firms from 500-999 to 1000+.

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