Melinda Holland started last year with high hopes for her business. Instead, 2025 ended with the company’s first layoffs in 40 years.
That’s due largely to the policies of one man: President Donald Trump. The cuts his administration made last year to federal science programs undercut a key piece of Holland’s business, a small technology company named Wildlife Computers.
Holland said sales to federal agencies such as NOAA dropped 30 percent between 2024 and 2025 — a precipitous drop after the company had spent decades carving a niche for itself in the tight-knit field of wildlife telemetry.
Her company, based in Washington state, makes the data-collecting tags that scientists use to track animals in the field. But interest in those devices waned once the Trump administration slashed the federal government’s investment in scientific research.
The federal retreat forced Holland to reduce the company’s staff of 70 people by 15 percent in December. And now, she says she’s scrambling to pick up new business from nonfederal partners, including state governments and international clients.
“The EU is still very interested in mitigation and climate and conservation,” Holland said. “So we are hoping to see at least continued funding from those sources.”
But making these pivots after so many years, she added, is “really difficult.”
Wildlife Computers isn’t alone in adjusting to the new federal landscape. Other small businesses have reported similar revenue losses in interviews with POLITICO’s E&E News — and they’ve cited shake-ups at the federal agencies as a likely driver.
Their stories align with the limited data that’s out there.
Sam Le, a contract regulation expert and small business consultant, recently found that federal spending on small business contracts declined in 2025, with the exception of companies participating in the 8(a) business development program, which targets small business owners with social or economic disadvantages.
“It was the first such decrease in a decade,” Le noted in a post on his Substack, GovCon Intelligence, last month after compiling and analyzing federal contracting data.
In an interview with POLITICO’s E&E News, Le added that “a lot of small businesses had their contracts cut during that mid 2025 time frame that DOGE was very active.”
“The administration has also pushed consolidation of contracts,” Le added. “They’re taking smaller contracts and turning them into one larger contract. Often those are so large that small businesses can’t adequately compete.”
The White House did not respond to an E&E News request seeking data on federal contracting figures. When pressed for comment, an Office of Management and Budget official sent an insult instead.
The hit last year to many federal contractors has been largely overshadowed by other impacts of Trump’s policies, such as the dramatic reduction in staff at science agencies like NOAA. But business leaders say the repercussions are no less important — and they warn Trump’s actions could shrink the U.S. research landscape and imperil scientific advancement.
“We invent research and instruments,” said one atmospheric technology company president, who asked not to be named out of fear of retaliation. “If you go to any atmospheric chemistry group in the world — if they’re a high-flying successful group — you’ll find [our] instruments in their laboratory, because they’re almost essential for doing world class atmospheric research.”
But over the past year, the company’s U.S. market “has dried up,” said the company president.
Business leaders add that Trump’s transformation of the federal government has done more than just shrink the revenues of many federal contractors.
They say it’s tougher to do business with Washington. Some have experienced payment delays, and others say there aren’t as many federal staff members on hand to handle contracts — leading to more headaches and longer wait times.
Companies that are focused on research and development have reported some of the biggest challenges, said Tonya Saunders, co-founder of the nonprofit Mid-Tier Advocacy, which champions the interests of small and midsize federal contractors.
But these problems have daunted small businesses of all kinds over the past year.
“Some of the companies are finding that they’re missing the internal small business support system that used to exist, such as the advocates within the agencies,” Saunders said. “Something is not matching up with how small business was accustomed to doing business.”
Trump defended the administration’s actions at a Jan. 20 press briefing, one year after his inauguration.
“I say, get rid of everybody that’s unnecessary, because that’s the way you make America great again,” he said. “When you have all these jobs where people are sitting around doing nothing and they get a lot of money from the government, it’s no good.”
But federal budget experts say centuries of institutional knowledge have left the federal government with the departure last year of thousands of employees from science-focused agencies such as NOAA, NASA and EPA. That could take years to rebuild, along with the networks these federal workers had established with outside researchers and contractors.
“The way staffing has been decimated, those people aren’t coming back,” said one long-time appropriations consultant, who asked not to be named out of fear of federal reprisal. “This is not a snap-back situation.”
The consultant added that the United States — and the world — will feel the aftershocks of this pullback, both scientifically and economically.
“No one can match” U.S. scientific investment dollar for dollar, the consultant said. “It’s just not gonna happen at the scale we’ve seen in terms of U.S. investment.”
‘A war on science’
The last 12 months have been especially hard for environmental science, say some business leaders.
The Trump administration reduced its federal workforce by about 10 percent, or 220,000 people, between Trump’s inauguration on Jan. 20, 2025, and November 2025, according to recent data from the U.S. Office of Personnel Management.
It also implemented dramatic shifts in federal priorities, directing agencies to cut funding for some climate and environmental programs as well as diversity, equity and inclusion initiatives.
In addition, the administration has frozen or canceled thousands of federal research grants, and it’s altered or deleted hundreds of federal databases and scientific websites in what many researchers have described as a wide-ranging assault on U.S. science. Some science policy experts have suggested the country’s research landscape may never be the same.
These cuts have translated to fewer or smaller federal contracts for some technology companies over the past year, consultants say. And they’ve also resulted in fewer university contracts for some companies who provide services to academics, a downstream effect of canceled federal funding for research institutions.
Data on federal contracts for environmental businesses in recent years shows a mixed picture. The government classifies contractors into dozens of specific categories, including environmental engineering, environmental consulting and environmental science services. Some indicate flat or even slightly increasing trends in recent years, while others have experienced declines in 2025 following years of upward growth.
That’s according to federal data compiled by Le at GovCon Intelligence.
The category for environmental engineering services, for instance, saw an increase in dollars going to small businesses between fiscal 2013 and 2024 — but a decline in 2025. Environmental remediation services similarly saw an increase in small business dollars between 2015 and 2024 but a decrease in 2025. And small business contracts in environmental consulting services increased between 2021 and 2024 but also declined in 2025.
On the other hand, a broad category including environmental research laboratories and environmental science services has shown an increase in small business dollars since 2018, including 2025.
Le cautioned that the categories can be broad in scope, and they don’t necessarily capture trends in specific kinds of business services — such as Wildlife Computers’ animal tracking tags. Still, the data does suggest that some general categories have seen a downturn in the past year.
That’s in line with the narratives some business leaders have described to E&E News.
Fondriest Environmental, which specializes in environmental monitoring equipment, contracts with a range of federal agencies including NOAA, the U.S. Geological Survey and the U.S. Fish and Wildlife Service.
But orders last year came in at a much slower rate than usual, said company President Steve Fondriest — a pattern he believes may be driven by a dwindling federal appetite for certain types of environmental measurements.
In the meantime, he says his company has sought to beef up its sales among nonfederal clients.
The trend over the past year “has caused a concern,” he said in an interview with E&E News. “And the concern definitely is there looking forward.”
To be sure, not all businesses have reported problems.
Williamson & Associates Technologies, which specializes in subsea engineering equipment, counts federal agencies and federally funded research institutes among its clients. Company co-leader Max Schlereth noted in an email that “we have not experienced a reduction in development with any of our partners recently.”
But other companies have experienced downturns similar to Fondriest’s — and their top executives say Trump’s widespread assaults on U.S. science are to blame.
The atmospheric technology company president reported that the company’s U.S. sales sank by at least half in 2025 compared with their normal levels. The company specializes in instruments that collect detailed environmental measurements, and most of its U.S. clients are federal agencies and universities, many of whom have also been affected by federal funding cuts over the past year.
Trump’s sprawling suite of tariffs, implemented last year, also have eaten into the company’s finances, the president added, causing some of its international markets to “grind to a halt.”
“We’ve had tough financial times, but not ones where we felt like we were targeted by the federal government to be killed, which is really what’s going on,” the company president said. “This is a war on science, and we’re scientists.”
Caught between administrations
Trump’s crackdown on diversity, equity and inclusion initiatives has taken a toll too, some CEOs say.
The Avanti Corp., like Wildlife Computers, has decades of experience with government contracts. But its revenue last year fell around $2 million short of what the company had expected in federal contracts in 2025, according to President and CEO Lynn Petrazzuolo, who’s been head of the business since 2001.
Avanti helps agencies address environmental challenges, assisting with science and engineering studies and consulting on environmental compliance and regulations. It has developed a broad portfolio of projects over the years, including oil and gas development, offshore wind and issues related to environmental health.
The company recently pivoted toward environmental justice initiatives, a priority for agencies like EPA under the Biden administration. But those kinds of contracts dried up last year after Trump issued a series of executive orders rolling back environmental justice and halting federal programs related to diversity, equity and inclusion.
“We had spent a good part of the last two years building up our environmental justice qualifications and practices, and we were winning more work in that area, had hired new people in that area,” Petrazzuolo said.
“And every last bit of that was gone in a few months,” she said.
Some of Avanti’s canceled projects included initiatives examining the impacts of offshore oil and gas development on urban areas and pilot programs to assist communities affected by urban heat, Petrazzuolo said. The company was able to bill the government for work it had already completed on its discontinued contracts, but its total earnings still fell far short of what it had projected for the year.
Avanti had employed about 30 people at the end of 2024, after a year of impressive growth. But Petrazzuolo found herself forced to lay off one employee in 2025 and could not afford to replace several others who left. The company was down to 23 or 24 staff members by the end of last year.
“It’s just been death by a thousand paper cuts,” Petrazzuolo said.
Trump, at his Jan. 20 press briefing, defended the administration’s termination of diversity, equity and inclusion policies.
“We ended the woke lunacy and restored common sense,” he said.
All eyes on the federal budget
Many small business leaders are anxiously eyeing the horizon as the new year gets under way. The recent federal budget negotiations have been top of mind for many.
The House on Tuesday passed a spending bill that will fund most of the federal government through the end of September, ending a partial government shutdown that began Jan. 31.
The Senate had already voted last month to approve significant funding for a number of science agencies, including NASA, NOAA and the National Science Foundation. The bill rejects the deep budget cuts the White House proposed last year; Trump wanted to slash some science programs by more than 50 percent.
Congressional support for science is “certainly really good news for us — the best we could have hoped for is happening on the budgets,” said the president of the atmospheric technology company who declined to be named.
But the company president expressed concern that the Trump administration still could attempt to withhold funds for research, noting that it’s already engaged in court battles over a variety of orders that lawyers have described as legally questionable over the past year.
“We still have a president that doesn’t follow the law,” the company executive said.
The same company president also expressed concern about the future of the Small Business Innovation Research program, which requires that some federal agencies allocate a percentage of their budget toward funding research and development initiatives at small companies.
The SBIR was established in 1982 and must be reauthorized every few years. It was up for renewal in September, but Congress failed to pass an extension amid disagreements about the terms of its reauthorization between Senate Small Business ranking member Ed Markey, a Democrat from Massachusetts, and Chair Joni Ernst, a Republican from Iowa.
That means the program currently doesn’t exist, and lawmakers are now embroiled in negotiations over its reauthorization.
The atmospheric technology company not only sells its products to agencies and universities — it also specializes in developing cutting-edge products with considerable support from the SBIR. But it hasn’t been able to apply for any new funding for the past four months, while the program is still in limbo.
The program was undergoing some alarming changes even before it expired, the company president added.
Trump last year directed some federal agencies to enact a 15 percent cap on the amount of indirect costs they can fund through research grants, including costs associated with overhead and administration. The move sparked outrage among universities and other research institutes. Researchers have argued the cap could cripple the U.S. scientific enterprise, and the new policy has elicited several lawsuits.
The reduced rate caps also have affected some funding awarded through the SBIR, the atmospheric technology company president noted.
The company was awarded funding by the Department of Energy just before the program expired last year, but the rate caps meant that “we were offered half the money that we proposed to do the same amount of work,” the president said.
“We accepted it, hoping that eventually this would go to court and the administration would lose,” the company president said. “But if the 15 percent stands universally, it will cripple the universities and science funding throughout the country.”
“It is a smart way to attack science and research without saying that you’re doing so,” the atmospheric technology company president added.
For now, the 15 percent indirect cost cap on SBIR funding appears to be limited to the Department of Energy, said Jere Glover, executive director of the Small Business Technology Council, an industry association that advocates for the SBIR.
But he’s worried that other agencies could follow suit if the caps aren’t struck down in court.
“If you cap indirect costs at 15 percent, that means small businesses, especially very small businesses, will suddenly find out when they come to get paid that they’re gonna get a lot less money than is normal — and, in fact, lose money,” Glover said. “And we’ve been fighting that for a long time.”
Some CEOs are adjusting their business strategies as they ponder what this year will bring.
Petrazzuolo, the head of Avanti, said she’s bidding on more state and municipal projects to compensate for the losses in federal contracts. But it’s hard work for a company to get its foot in the door, she added — and she’s had to partner with larger companies on some projects in order to build her reputation with new clients.
“It’s like I’m starting my business all over again,” Petrazzuolo said. “Having to go in as a subcontractor, having to go in on these teeny tiny little bits to create the relationships.”
Holland, the CEO of Wildlife Computers, also is hoping to build new relationships with state governments and international clients that invest heavily in conservation, environmental science or fisheries management.
But the company is still in “survival mode” as the new year gets underway, she added.
On top of the $2 million in lost revenue last year, it’s still waiting on a number of overdue payments to come through.
“I don’t think people recognize the impact on small companies,” Holland said. “I don’t think the research community is recognizing the impact on us.”
The company is striving to remain successful as it pivots toward other business partners, Holland added. But if small companies like Wildlife Computers “were to go away,” she said, “it will have a huge impact on the research that is being done.”
