The International Labor Organization faces “critical” cash flow problems and could abolish up to 295 positions, about 8% of its workforce, if the United States and other countries do not pay their dues, according to an internal document.
The 35-page draft, sent to staff on Monday by ILO Director-General Gilbert Houngbo and seen by Reuters, details proposals to reform the U.N. agency, which promotes international labor rights, and cut costs.
The proposals, which also include the possibility of moving dozens of staff away from the ILO headquarters in Geneva, will be subject to further consultation before being presented to its governing body in November.
“With arrears from several Member States totaling more than 260 million Swiss francs ($323.34 million) – approximately a third of the biennial assessment – the cash flow situation has become critical,” the document says.
‘A challenging financial and liquidity situation’
The United States is the largest donor to the ILO, which won the Nobel Peace Prize in 1969 for its contributions to improving global working conditions and protecting human rights. It has helped remove many children from child labor.
It was not immediately clear what impact the cuts would have on operations.
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The US contributes 22% of the ILO’s regular budget but owes more than 173 million francs, with China, Germany and others also behind on their payments. The United States did not immediately respond to a request for comment.
The ILO, which says on its website that it employs about 3,500 people, brings together governments, employers and workers to set labor standards around the world.
In a statement to Reuters, the ILO said that, like the broader UN system, it faces “a challenging financial and liquidity situation due to the delay in assessed contributions” that has affected its cash flow.
“As the Director-General has underlined, every effort is being made to avoid involuntary redundancies of staff, but this scenario cannot be completely ruled out if the financial situation does not stabilize,” he said.
“ILO senior management keeps staff regularly informed of developments and is in dialogue with the Staff Union as part of this process.”
Two main scenarios
The document seen by Reuters sets out two main scenarios. In what it describes as a worst-case scenario – a 20% budget cut in 2026-27 – up to 295 positions could be eliminated across all locations and grades could be cut to help generate savings of $93.2 million.
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Around 225 jobs have already been cut at the ILO headquarters in Geneva and in field offices this year due to cuts in US funding under President Donald Trump. The ILO’s $930 million budget for 2026-27 was approved after this, in June.
The document said regular budget contribution collection slowed in September “to the point where program needs could no longer be fully funded.” Reserves are enough to pay staff salaries until the end of 2025 only if costs are controlled through travel and hiring freezes, he said.
Potential employee relocations from Geneva headquarters
Under proposals involving a less dire funding situation, a quarter of the professional staff in administration, communications and research in Geneva – 72 positions – could be relocated.
Relocating 50 employees from Geneva to a training center in Turin could save $6 million over two years, the document said.
Some positions covering Europe and Central Asia could move to Budapest and some responsibilities for the Arab States could move from Beirut to Doha, he added.
Vacating and renting two floors of the Geneva headquarters could generate $5.4 million in rental income over two years, he added.
An ILO Staff Union resolution has expressed “deep concern” about the financial “crisis” and draft proposals and said management had not engaged in “good faith social dialogue” about the plans.
The proposals are separate from UN Secretary-General António Guterres’ plans to reduce the UN’s regular budget by 15%.
With information from Reuters.
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