By Olivia Le Poidevin and Emma Farge

GENEVA (Reuters) -The World Health Organization (WHO) is proposing to reduce staff numbers and the scale of its work as it slashes its budget by just over one fifth due to the impact of U.S. funding cuts, according to an internal memo seen by Reuters.

U.S. President Donald Trump's administration withdrew from the WHO upon taking office in January, saying the global health agency had mishandled the COVID-19 pandemic and other international health crises. The U.S. is by far the U.N. health agency's biggest financial backer, contributing around 18% of its overall funding.

"The United States' announcement, combined with recent reductions in official development assistance by some countries to fund increased defence spending, has made our situation much more acute", stated the WHO memo, which was dated March 28 and signed by WHO's Director-General Tedros Adhanom Ghebreyesus.

The WHO did not immediately respond to a request for comment.

The U.S. withdrawal has exacerbated a funding crisis due to member states reducing their development spending. Faced with an income gap of nearly $600 million this year, the WHO has proposed to slash its budget for 2026-27 by 21% from US$5.3 billion to US$4.2 billion, according to the memo.

In February, the WHO's executive board had initially reduced the proposed budget for 2026-27 from US$5.3 billion to US$4.9 billion, according to the note.

"Despite our best efforts, we are now at the point where we have no choice but to reduce the scale of our work and workforce," the memo said.

The WHO will reduce jobs at senior leadership level at its headquarters in Geneva, Switzerland, though all levels and regions will be affected, the memo added. It will decide on how to prioritize its work and resources by the end of April.

WHO documents show the U.N. agency has over a quarter of its 9,473 staff in Geneva.

An internal memo from March 10, which was also seen by Reuters, said the World Health Organization had begun fixing priorities and announced a one-year limit on staff contracts.

The memo said that staff were working to secure additional funding from countries, private donors and philanthropists.

(Reporting by Olivia Le Poidevin; Editing by Aidan Lewis)