The International Labour Organization (ILO) has warned that delayed payments from member states — including the United States — have created a “critical” cash flow crisis that could force job cuts across the agency.
An internal document seen by Reuters outlines proposals to abolish up to 295 posts, representing about 8 percent of the ILO’s 3,500-strong workforce, if arrears are not settled. The 35-page draft, sent to staff by Director-General Gilbert Houngbo, details potential cost-saving reforms and relocation plans that will be presented to the organisation’s governing body in November.
According to the document, member states owe more than 260 million Swiss francs (£232 million) — roughly one-third of the agency’s biennial assessment. The U.S., the ILO’s largest contributor, accounts for around 22 percent of the budget and owes over 173 million francs. China, Germany, and other countries are also behind on payments.
The ILO told Reuters it faces “a challenging financial and liquidity situation due to delayed assessed contributions,” adding that “every effort is being made to avoid involuntary staff terminations,” though such outcomes could not be entirely ruled out if funding remains uncertain.
Under a worst-case scenario described in the draft, the agency’s 2026–27 budget could be reduced by 20 percent, prompting savings of $93 million through staff reductions and grade adjustments. A less severe plan would relocate 72 administrative, communications, and research roles from Geneva, including 50 positions moved to a training centre in Turin. Additional posts could shift from Beirut to Doha and from Europe and Central Asia to Budapest. Renting two floors of the Geneva headquarters could generate about $5.4 million in income over two years.
The ILO’s regular budget contribution collection “slowed in September to the point where programme needs could no longer be fully funded,” the document notes. Reserves would cover salaries only until the end of 2025, assuming continued travel and hiring freezes.
The ILO’s Staff Union has expressed “profound concern” over the situation, urging management to maintain dialogue with workers as proposals advance toward formal review next month.
Founded in 1919, the ILO is the only tripartite U.N. agency, bringing together governments, employers, and worker representatives to set international labour standards. It plays a central role in shaping global employment policy and supply-chain labour rights — issues closely monitored by multinational companies and investors seeking to comply with ethical sourcing, ESG, and due-diligence regulations. Any disruption to its monitoring or advisory functions could affect corporate reporting standards and the enforcement of decent-work commitments worldwide.
