‘Catastrophic’ layoffs strike international aid organizations during Trump administration's funding halt
The foreign development sector is experiencing significant job losses, with thousands of U.S. workers facing furloughs or layoffs due to dwindling resources in the industry.
TroibNews 
The suspension of foreign aid by the Trump administration is having a detrimental impact on international development organizations and private federal contractors engaged in aid activities abroad, potentially causing enduring harm to U.S. global engagement.
In June, the State Department mandated an immediate 90-day halt to U.S. foreign aid and issued “stop-work orders” on almost all active foreign assistance awards. This rapid action has left numerous government contractors and global aid organizations—such as those providing HIV/AIDS treatment, child health services, educational programs, and food security initiatives—struggling to operate or pay their employees.
Eight individuals from the foreign aid sector, who requested anonymity due to fears of retribution from the administration, shared with PMG that the aid freeze has severely hindered their ability to implement global aid initiatives. Some foresee widespread job losses for thousands of foreign aid professionals.
“I can’t even begin to describe how cataclysmic it is, everyone is furloughing or laying off staff,” one individual explained. “It’s almost 5,000 people, and it’s just starting.”
The United States is the leading global provider of humanitarian aid, distributing billions of dollars through various agencies, including the U.S. Agency for International Development (USAID). Most of USAID’s funding is awarded competitively via contracts, grants, or cooperative agreements with international development organizations and private contractors.
These groups often incur expenses upfront for their missions abroad, seeking reimbursement from the federal government. However, the interruption in federal funding for these essential programs has forced many organizations into crisis mode.
Recovery for some federal contractors and NGOs may take months or even years, while others lack sufficient funds to withstand the 90-day freeze.
“We’re currently looking at the possibility of many hundreds of seasoned professionals in the humanitarian and development and human rights field going completely out of business,” noted a senior executive for an aid organization.
One source told PMG that their organization hadn't received federal funding for over a month. Another anticipated that several NGOs might file for bankruptcy this week, while a third attributed the urgency to the “30-day world” of development, where organizations rely on monthly federal payments to sustain operations. If that support ceases, resources deplete quickly.
“Every company has lost so much now as a result of offering these furloughs,” one industry worker reported. “Even if they start back up say two months from now, there’s likely going to be very few implementations … they will have no more staff.”
A contractor for USAID expressed that evaluating their projects and budgets, they would struggle to sustain operations for “even a fraction” of the 90-day pause period. “It's not a pause if there are no pieces to be picked up when you want to resume. It would be like pausing feeding your dog for 90 days.”
Secretary of State Marco Rubio has issued a waiver to allow “life-saving humanitarian assistance” to continue, though its scope remains unclear. A source mentioned to PMG that funds from the waiver program had not yet started to arrive, and the stop-work order remained in effect.
A State Department spokesperson indicated that some salaries and administrative expenses would continue under waivers. "Staff have been given a template for waiver requests,” the spokesperson stated.
The spokesperson emphasized that the aid suspension aimed to align it with the America First foreign policy agenda. “For far too long, the United States foreign aid industry and bureaucracy have not been aligned with American interests, and in many cases, antithetical to American values,” the spokesperson remarked. “They serve to destabilize world peace by promoting ideas in foreign countries that are directly inverse to harmonious and stable relations internal to and among countries.”
USAID did not respond to a request for comment.
A State Department official recently clarified which components of the President’s Emergency Plan for AIDS Relief, which provides HIV treatments primarily in Africa, were affected. However, Sen. Bill Cassidy, chair of the Senate Committee on Health, Education, Labor and Pensions, stated on X that he was informed “drugs are still being held at clinics in Africa.” Cassidy called for a reversal of this situation.
The crisis may escalate as the Trump administration moves to merge USAID with the State Department, potentially complicating funding decisions for such organizations.
Some prominent Republicans advocate for this merger and support substantial restructuring within the industry. Rep. Brian Mast, chair of the House Foreign Affairs Committee, commented on CBS’ Face the Nation that he was not worried about the layoffs “because of the grift that has been working on to the American taxpayer, the American worker.”
Mast claimed that only 10 to 30 percent of the funds USAID managed ultimately supported aid, asserting that he was collaborating with Rubio “to make sure there’s the appropriate command-and-control of these agencies.” However, researchers challenge the assertion that such a low percentage of USAID funding reaches intended recipients.
Early layoffs have already commenced. An email obtained by PMG revealed that last week, development firm Credence Management Solutions laid off about 400 employees in its global health division.
The CEO of DT Global, a major development contractor, reportedly informed staff last week that industry layoffs could reach 2,000 to 3,000 in early February. Both Credence Management Solutions and DT Global did not respond immediately to comment requests.
A director at a leading USAID contractor revealed to PMG that more than two-thirds of their workforce would be furloughed by the week’s end, indicating a “bleak at best” outlook for the sector.
“This is starting to look like an industry crash,” another industry insider commented.
As companies grapple with challenges, individuals in Washington’s foreign aid sector are facing an oversaturated job market, with thousands suddenly unemployed and no clear path forward. One person, who was set to start a new position in the field, had their offer retracted due to the elimination of their role.
“We’re all flooding the next-door neighbor sectors, which cannot possibly absorb all of us,” this individual said. “Even though we know we’re each other's competitors, there is still a community that I hope we’ll maintain.”
In a recent interview on “The Megyn Kelly Show,” Rubio stated that the aid pause intended to allow the federal government time to review existing contracts. He emphasized that funding should “be a tool that we use to advance the national interest” and asserted that the U.S. government “is not a charity.”
An individual who has worked in foreign aid across multiple administrations remarked that while contract reviews typically accompany a new administration, the Trump administration's abrupt approach far exceeds previous practices.
“Each administration has their own priorities, they take a pause, they reflect, they review, they adjust,” this person noted. “What is damaging is the fact that it was so abrupt and unequivocal.”
“It’s very challenging to have a reform conversation when you’re in the middle of shutting everything down,” another added.
A variety of groups are facing the fallout, including the International Republican Institute, which features Republican senators on its board and conducts pro-democracy initiatives abroad. IRI President Daniel Twining conveyed to PMG that while he supports a review of foreign aid funding, he hopes such a review occurs swiftly, noting that “our adversaries aren’t pausing, and they would relish in seeing [foreign assistance] go away.”
Amid the uncertainty surrounding U.S. foreign assistance, other nations may position themselves to fill the gaps left behind. Notably, the Chinese government has been advancing its “Belt and Road Initiative” for over a decade, aiming to build infrastructure in developing countries, particularly in Latin America and Africa, to exert political influence.
This scenario raises concerns for some lawmakers, especially with escalating global competition. The top Democrats on the House and Senate committees overseeing both the State Department and USAID expressed worries in a letter sent to the agency regarding the funding suspension.
“Not only will lives be lost, but we are also ceding ground to China, damaging our standing in the world at a time of heightened geopolitical competition,” the lawmakers warned.
Sen. Chris Murphy, a member of the Senate Foreign Relations Committee, pointed out in a tweet that “China will fill the void” created in developing countries, which will likely “ONLY be able to rely on China for help.”
In addition to providing adversarial nations like China an opportunity to influence, the funding freeze undermines the U.S.'s reputation as a dependable development partner. The reduction in aid, a critical mechanism for fostering trust and relationships internationally, poses a threat to the nation’s public diplomacy efforts.
This assistance often extends to direct support to governments, thereby fortifying U.S. security by maintaining alliances during peaceful times—a strategy now at risk of erosion.
“We have spent more than 50 years building up goodwill around the world, because it’s the right thing to do, and it protects our national security,” a foreign aid professional remarked. “It costs a whole lot less to feed someone than it does to kill someone.”
Holly Otterbein contributed to this report.
Mark B Thomas contributed to this report for TROIB News
In June, the State Department mandated an immediate 90-day halt to U.S. foreign aid and issued “stop-work orders” on almost all active foreign assistance awards. This rapid action has left numerous government contractors and global aid organizations—such as those providing HIV/AIDS treatment, child health services, educational programs, and food security initiatives—struggling to operate or pay their employees.
Eight individuals from the foreign aid sector, who requested anonymity due to fears of retribution from the administration, shared with PMG that the aid freeze has severely hindered their ability to implement global aid initiatives. Some foresee widespread job losses for thousands of foreign aid professionals.
“I can’t even begin to describe how cataclysmic it is, everyone is furloughing or laying off staff,” one individual explained. “It’s almost 5,000 people, and it’s just starting.”
The United States is the leading global provider of humanitarian aid, distributing billions of dollars through various agencies, including the U.S. Agency for International Development (USAID). Most of USAID’s funding is awarded competitively via contracts, grants, or cooperative agreements with international development organizations and private contractors.
These groups often incur expenses upfront for their missions abroad, seeking reimbursement from the federal government. However, the interruption in federal funding for these essential programs has forced many organizations into crisis mode.
Recovery for some federal contractors and NGOs may take months or even years, while others lack sufficient funds to withstand the 90-day freeze.
“We’re currently looking at the possibility of many hundreds of seasoned professionals in the humanitarian and development and human rights field going completely out of business,” noted a senior executive for an aid organization.
One source told PMG that their organization hadn't received federal funding for over a month. Another anticipated that several NGOs might file for bankruptcy this week, while a third attributed the urgency to the “30-day world” of development, where organizations rely on monthly federal payments to sustain operations. If that support ceases, resources deplete quickly.
“Every company has lost so much now as a result of offering these furloughs,” one industry worker reported. “Even if they start back up say two months from now, there’s likely going to be very few implementations … they will have no more staff.”
A contractor for USAID expressed that evaluating their projects and budgets, they would struggle to sustain operations for “even a fraction” of the 90-day pause period. “It's not a pause if there are no pieces to be picked up when you want to resume. It would be like pausing feeding your dog for 90 days.”
Secretary of State Marco Rubio has issued a waiver to allow “life-saving humanitarian assistance” to continue, though its scope remains unclear. A source mentioned to PMG that funds from the waiver program had not yet started to arrive, and the stop-work order remained in effect.
A State Department spokesperson indicated that some salaries and administrative expenses would continue under waivers. "Staff have been given a template for waiver requests,” the spokesperson stated.
The spokesperson emphasized that the aid suspension aimed to align it with the America First foreign policy agenda. “For far too long, the United States foreign aid industry and bureaucracy have not been aligned with American interests, and in many cases, antithetical to American values,” the spokesperson remarked. “They serve to destabilize world peace by promoting ideas in foreign countries that are directly inverse to harmonious and stable relations internal to and among countries.”
USAID did not respond to a request for comment.
A State Department official recently clarified which components of the President’s Emergency Plan for AIDS Relief, which provides HIV treatments primarily in Africa, were affected. However, Sen. Bill Cassidy, chair of the Senate Committee on Health, Education, Labor and Pensions, stated on X that he was informed “drugs are still being held at clinics in Africa.” Cassidy called for a reversal of this situation.
The crisis may escalate as the Trump administration moves to merge USAID with the State Department, potentially complicating funding decisions for such organizations.
Some prominent Republicans advocate for this merger and support substantial restructuring within the industry. Rep. Brian Mast, chair of the House Foreign Affairs Committee, commented on CBS’ Face the Nation that he was not worried about the layoffs “because of the grift that has been working on to the American taxpayer, the American worker.”
Mast claimed that only 10 to 30 percent of the funds USAID managed ultimately supported aid, asserting that he was collaborating with Rubio “to make sure there’s the appropriate command-and-control of these agencies.” However, researchers challenge the assertion that such a low percentage of USAID funding reaches intended recipients.
Early layoffs have already commenced. An email obtained by PMG revealed that last week, development firm Credence Management Solutions laid off about 400 employees in its global health division.
The CEO of DT Global, a major development contractor, reportedly informed staff last week that industry layoffs could reach 2,000 to 3,000 in early February. Both Credence Management Solutions and DT Global did not respond immediately to comment requests.
A director at a leading USAID contractor revealed to PMG that more than two-thirds of their workforce would be furloughed by the week’s end, indicating a “bleak at best” outlook for the sector.
“This is starting to look like an industry crash,” another industry insider commented.
As companies grapple with challenges, individuals in Washington’s foreign aid sector are facing an oversaturated job market, with thousands suddenly unemployed and no clear path forward. One person, who was set to start a new position in the field, had their offer retracted due to the elimination of their role.
“We’re all flooding the next-door neighbor sectors, which cannot possibly absorb all of us,” this individual said. “Even though we know we’re each other's competitors, there is still a community that I hope we’ll maintain.”
In a recent interview on “The Megyn Kelly Show,” Rubio stated that the aid pause intended to allow the federal government time to review existing contracts. He emphasized that funding should “be a tool that we use to advance the national interest” and asserted that the U.S. government “is not a charity.”
An individual who has worked in foreign aid across multiple administrations remarked that while contract reviews typically accompany a new administration, the Trump administration's abrupt approach far exceeds previous practices.
“Each administration has their own priorities, they take a pause, they reflect, they review, they adjust,” this person noted. “What is damaging is the fact that it was so abrupt and unequivocal.”
“It’s very challenging to have a reform conversation when you’re in the middle of shutting everything down,” another added.
A variety of groups are facing the fallout, including the International Republican Institute, which features Republican senators on its board and conducts pro-democracy initiatives abroad. IRI President Daniel Twining conveyed to PMG that while he supports a review of foreign aid funding, he hopes such a review occurs swiftly, noting that “our adversaries aren’t pausing, and they would relish in seeing [foreign assistance] go away.”
Amid the uncertainty surrounding U.S. foreign assistance, other nations may position themselves to fill the gaps left behind. Notably, the Chinese government has been advancing its “Belt and Road Initiative” for over a decade, aiming to build infrastructure in developing countries, particularly in Latin America and Africa, to exert political influence.
This scenario raises concerns for some lawmakers, especially with escalating global competition. The top Democrats on the House and Senate committees overseeing both the State Department and USAID expressed worries in a letter sent to the agency regarding the funding suspension.
“Not only will lives be lost, but we are also ceding ground to China, damaging our standing in the world at a time of heightened geopolitical competition,” the lawmakers warned.
Sen. Chris Murphy, a member of the Senate Foreign Relations Committee, pointed out in a tweet that “China will fill the void” created in developing countries, which will likely “ONLY be able to rely on China for help.”
In addition to providing adversarial nations like China an opportunity to influence, the funding freeze undermines the U.S.'s reputation as a dependable development partner. The reduction in aid, a critical mechanism for fostering trust and relationships internationally, poses a threat to the nation’s public diplomacy efforts.
This assistance often extends to direct support to governments, thereby fortifying U.S. security by maintaining alliances during peaceful times—a strategy now at risk of erosion.
“We have spent more than 50 years building up goodwill around the world, because it’s the right thing to do, and it protects our national security,” a foreign aid professional remarked. “It costs a whole lot less to feed someone than it does to kill someone.”
Holly Otterbein contributed to this report.
Mark B Thomas contributed to this report for TROIB News
