By Olivia Le Poidevin

GENEVA (Reuters) - The Geneva-based International Labour Organization (ILO) has axed about 225 jobs due to cutbacks in U.S. funding at the United Nations agency, its head said on Wednesday.

The job losses, which affect posts at the ILO's Geneva headquarters and in the field, follow the U.S. administration's decision to reduce voluntary contributions under President Donald Trump, ILO Director-General Gilbert F. Houngbo said.

"One job loss is too many ... You would not imagine the mood that has generated within my staff," he told reporters in Geneva.

The ILO head also raised the possibility of relocating some of the agency's operations out of Geneva, one of the world's most expensive cities, to ease financial pressures, which is also part of broader talks on reform.

Potential locations could be European cities such as Turin, Budapest, or Bonn, or further afield in places including Doha and Pretoria, Houngbo said.

Short-term contractors and employees at some other U.N. agencies like the International Organization for Migration have already been informed of redundancies.

But thousands more job losses could be on the way as international agencies grapple with funding shortages due to the withdrawal of aid by the Trump administration and other donors.

"The U.S. is the top contributor for assessed and voluntary contribution, so our challenge is double," Houngbo said, highlighting also a broader pullback in financial support among member states.

The U.S. accounts for 22% of the ILO's $880 million two-year budget for 2026-2027, expected to be approved at the ILO's International Labour Conference next week.

"Worst case scenario, we may have to consider a revised budget. I don't recall the last time that happened to the ILO," Houngbo said.

He said he is developing a business continuity plan in case of further cuts to financial support, and that the ILO will be implementing a freeze on external recruitment, as well as launching a voluntary redundancy programme.

(Reporting by Olivia Le Poidevin; Editing by Rachna Uppal and Helen Popper)