UN may cut staff by 20%, internal memo says

By John Shiffman

WASHINGTON (Reuters) -The United Nations Secretariat is preparing to cut its $3.7 billion budget by 20% and slash about 6,900 jobs, according to an internal memo seen by Reuters.

The directive, which asks staff to detail cuts by June 13, comes amid a financial crisis triggered in part by the United States, which annually funds nearly a quarter of the world body.

In addition to U.S. foreign aid cuts under President Donald Trump that have gutted U.N. humanitarian agencies, the U.S. owes - for arrears and the current fiscal year - nearly $1.5 billion.

The memo's author, U.N. Controller Chandramouli Ramanathan, did not cite the U.S. failure to pay. He noted that the cuts are part of a review launched in March dubbed "UN80."

"It is an ambitious effort to ensure that the United Nations is fit for purpose to support 21st-century multilateralism, reduce human suffering and build better lives and futures for all," Ramanathan said. "I count on your cooperation for this collective effort whose aggressive timelines are recognized." 

The cuts would take effect January 1, the start of the next budget cycle.

In public briefings to U.N. diplomats this month, Secretary General Antonio Guterres said he is considering a massive overhaul that would merge major departments and shift resources across the globe. He said the U.N. may consolidate some agencies, trim others, move staff to cheaper cities, cut duplication and eliminate redundant bureaucracy.

"These are times of peril, but they are also times of profound opportunity and obligation," Guterres said on May 12. 

"Make no mistake: uncomfortable and difficult decisions lie ahead. It may be easier and even tempting to ignore them or kick the can down the roads. But that road is a dead end."

The U.S. failure to pay its assessments has also created a liquidity crisis for the U.N., a problem exacerbated by China’s repeated late payments. Together, the two nations account for more than 40% of U.N. funding.

In addition, the Trump administration has withdrawn hundreds of millions of dollars in discretionary funds, forcing the abrupt halt of dozens of humanitarian programs that U.N. officials have said will cost lives. The proposed U.S. budget for the coming year, which must be approved by Congress, has eliminated or drastically reduced funding for several U.N. programs, including peacekeeping.

In April, Tom Fletcher, who leads the United Nations Office for the Coordination of Humanitarian Affairs, told employees that U.S. funding cuts would force the agency to trim 20% of its staff to address a shortfall of $58 million.

Richard Gowan, UN director at the International Crisis Group, said it was unclear if the cuts will affect the Trump administration position.

“Diplomats think that Guterres hopes that if he shows he will make these cuts, then the administration will ease off on their threats to zero out funding for the UN,” Gowan said.

“That's possible. It's also possible that the administration will just pocket the cuts and not make any concessions.”

(Reporting by John Shiffman; Additional reporting by Michelle Nichols; Editing by Bill Berkrot)