Small Businesses Are Bleeding Jobs, and It Feels Personal

Summary / TL;DR

Picture this: You're sitting across from someone you've known for seven years, someone whose kids call you "auntie," and you have to tell them they no longer have a job. That's what happened to Lacie Carroll-Marsh 17 times this year. American small businesses shed 120,000 jobs in November alone, and behind every single number is a story that'll make you rethink everything you thought you knew about the economy.

Key Takeaways

1. Small businesses with fewer than 50 employees cut 120,000 jobs in November 2025, marking a sharp decline right before the crucial holiday shopping season.
   
2. Rising costs from tariffs, healthcare premiums jumping from $728 to $1,400 per employee, and labor shortages are forcing owners to choose between their people and survival.

When Business Gets Personal

Here's something they don't teach you in business school: how to fire someone you've gone camping with. Carroll-Marsh runs Malicious Women, a craft candle company in Washington, and she had to lay off more than half her team this year. These weren't just employees. They were friends. Family, even.

"There's tears on both sides," she told reporters. And that's the thing about small business layoffs that the data can't show you.

The numbers from payroll giant ADP paint a grim picture. Companies are trimming their workforce just as the holiday season kicks into gear, which is like running out of gas right before a cross-country road trip. ADP's chief economist put it bluntly: "The labor market is not weak but it is weakening, and the first to crack is small establishments."

But let's talk about what's actually causing this mess.

The Perfect Storm of Rising Costs

Stuart Leventhal owns Down to Earth Living, a furniture store in New York, and he's watching his profit margins shrink by about 10% this year. Why? Because he refuses to let his long-time employees go. "We're a good employer and we like to protect our people," he said. That's admirable, but it's costing him dearly.

Then there's the tariff situation. Carroll-Marsh's candle jars from Taiwan? They now come with a 20% customs tariff slapped on top. Her soy wax costs 12% more than last year, partly because of a labor shortage on farms after more than 527,000 undocumented immigrants were deported in 2025.

Healthcare costs are about to explode too. Starting February, Carroll-Marsh's monthly contribution per employee jumps from $728 to $1,400. That's nearly double. The reason? Affordable Care Act subsidies expire December 31st, and millions of Americans are about to feel that pain.

Consumers Are Scared Too

Hanna Scholz runs Bike Friday in Oregon, and she's noticed something interesting. Her American customers are holding back on purchases, nervous about rising living costs and economic uncertainty. But her Asian customers? They're still buying strong.

Consumer confidence dropped to its lowest point in seven months in November. People are worried about inflation, tariffs, and what's coming next. And when people get worried, they stop buying custom bikes and fancy furniture.

Down to Earth Living is feeling this too. Shoppers are buying fewer pieces or pushing purchases into next year. It's death by a thousand paper cuts for small business owners trying to stay afloat.

The Human Cost

Carroll-Marsh might have to let go of three more employees if sales don't recover. "We are on a skeleton crew," she said. "Every single member of my retail team is working at the warehouse."

Some businesses aren't laying people off outright. They're just not replacing workers who leave, like Scholz did when three long-time employees left for health reasons. Her headcount dropped from 24 to 21. "It slows the bleeding," she explained.

This is what economists call adjustments "at the margin," but there's nothing marginal about losing your job or watching your business struggle to survive.

Who's to Blame?

Everyone's pointing fingers in Washington. The Main Street Alliance blames Trump's trade wars and healthcare cuts. The White House says it's temporary, pointing to tax cuts and deregulation. Commerce Secretary Howard Lutnick chalked it up to deportations and the recent government shutdown, promising "fantastic" numbers next year.

But here's the truth: small businesses don't care about blame games. They care about making payroll, keeping the lights on, and not having to look their employees in the eye and say goodbye.

Conclusion

The small business crisis unfolding right now isn't just about numbers on a spreadsheet. It's about real people making impossible choices between their livelihoods and the people they care about. With 120,000 jobs cut in November and costs still climbing, we're watching Main Street America crumble in real time. Whether things get better in 2026 depends on who you ask, but for business owners like Carroll-Marsh and Leventhal, the future feels anything but certain. The question isn't just whether small businesses can survive this storm, it's whether we'll recognize Main Street when it's over.