(The New Humanitarian) The International Rescue Committee, one of the oldest humanitarian aid organizations in the United States, is cutting thousands of staff, in another sign of the turmoil rippling across the humanitarian sector as the US aid funding freeze continues.

“We have had to take immediate and significant cost-cutting measures, including laying off and furloughing thousands of IRC personnel around the world,” the IRC said in a statement to The New Humanitarian.

The organization cites “the dual impact” of the freeze on “the majority of foreign assistance programmes”, and “the difficulty accessing funds disbursed through the US government’s payment system”.

“Like many peer humanitarian agencies, IRC is responding to the impacts on our clients of disruptions to US foreign assistance funding for critical programmes,” the IRC statement read.

In a separate letter to staff last week, CEO David Miliband announced a first round of several hundred furloughs (unpaid leave) and imminent layoffs.

“As much as we would like to believe there will be some relief of the financial pressure on our organisation and that our programmes will be able to resume, the reality is that there will assuredly be a significant reduction of [US government] support for our programmes this fiscal year, impacting services and staffing,” Miliband wrote.

The IRC’s leadership board cancelled staff pay raises and will take a 20% pay cut, Miliband’s letter said. Miliband’s own salary – about $1.2 million including benefits, according to tax filings for 2022 – is one of the highest in the humanitarian sector.

The IRC has previously said it has more than 17,000 global staff.

Layoffs, furloughs, and frozen aid

The IRC moves mirror cuts, suspensions, and sudden aid stoppages happening throughout the humanitarian sector as decision-makers grapple with the fallout from US President Donald Trump’s freeze and the attempted dismantling of the government’s aid agency, USAID.

Layoffs and furloughs have hit many international NGOs and aid organisations, including the Danish Refugee Council, Mercy Corps, the Norwegian Refugee Council, Catholic Relief Services (CRS), and FHI 360.

Local aid organisations, from community groups to national NGOs, have been particularly hard hit – most have minimal reserves and fewer donors. NEAR, a network of Global South civil society organisations, says 83% of its members have had programmes paused, affecting millions, while staff lay-offs are widespread.

The vast majority of the humanitarian sector’s workforce are local staff, who are often a part of the communities they help.

The aid freeze pushed organisations to suddenly suspend programmes, leaving millions of people who use US-funded aid with little warning or time to find alternatives.

HIV-positive children dropping out of programmes

Some examples of the impacts, according to the NGO network ICVA: HIV-positive children are dropping out of anti-retroviral (ARV) treatment programmes, feeding centres for malnourished people have closed, and water and sanitation programmes have shut.

The funding crisis highlights the sector’s deep dependence on a small group of mainly Western donors, including the United States. About 42%, or $650 million, of the IRC’s original 2025 budget comes from the US government, Miliband’s letter said.

Save the Children’s US entity received 54% of its operating revenue from US government grants and contracts in 2023, according to financial statements. Staff there have told The New Humanitarian that internal announcements on cuts are imminent.

Similarly, US funding made up 37% of support for CARE, 35% for CRS, and at least 41% for Mercy Corps. Their dependence gets passed along to subcontracted frontline local organisations.

A turning point?

The upheaval at IRC and elsewhere may be a pivot point for the sector, which has grown rapidly over the last decade to match rising needs and donor funding – but mostly hasn’t planned for the day the taps might be turned off.

The  New York City-based IRC, first founded in 1933 to help people fleeing Nazi Germany, saw its operating revenue jump from about $560 million in 2014 to $1.36 billion in 2023, largely mirroring donor funding increases through the COVID-19 pandemic.

The organization, which in the 1950s and 1960s expanded operations to include the relief and resettlement of refugees from Eastern Europe, the Soviet Union, Viet Nam, and Cuba, today works in 40 crisis-affected countries around the world – from Gaza to Sudan and Afghanistan and the Democratic Republic of Congo. It was already weathering a fiscal crisis and previous staff cuts driven by poor budgeting and forecasting practices, rising costs, and lower-than-expected revenue.

Critics say NGOs like the IRC in particular have prioritised unchecked growth, buoyed by significant but unsustainable pandemic income.

Even at the start of its current fiscal year, and with other organizations cutting costs and undergoing painful restructures months earlier, the IRC was forecasting “sustained annual income” of $1.5 billion a year.

Now, like the rest of the humanitarian world and the wider aid sector, the IRC appears to be reining in its expectations.

“There is a clear path through this period,” Miliband told staff in his email. “The IRC will remain a vital resource for tens of millions of clients, smaller than five years ago but double the size of 10 years ago. I am just so sorry at the price to be paid to get there.”

This story was originally published by The New Humanitarian, an independent, Geneva-based media service covering humanitarian crises, and the people affected by those crises, around the world. 

Image Credits: Mustafa Saeed/IRC, The New Humanitarian/IRC.