By Emma Farge
GENEVA, Aug 28 (Reuters) - The U.N. refugee agency has scaled back its budget by 16% and lowered its official headcount by around 3,500 as it adapts to new financial constraints at a time when global displacement is forecast to climb to an all-time high next year, according to diplomats and documents seen by Reuters.
The total cuts, on paper, would amount to a near halving of the workforce and a drop in the budget of a third since 2025, laying bare the cumulative impact of cuts due to reductions
in foreign aid budgets by the Trump administration and others.
In 2025, UNHCR had 16,126 budgeted posts versus 12,051 this year and 8,540 in 2027, the budget documents showed, excluding temporary roles and contractors.
UNHCR officials presented the latest cuts to member states at a U.N. meeting in Geneva on Thursday, according to three diplomats who attended.
However, a U.N. refugee agency spokesperson said that, in reality, such large cuts would not be implemented since many posts were never filled in previous budgets, which reflected needs and funding goals, rather than realised donations.
'BUDGET CONSTRAINTS ARE REAL'
The spokesperson said income projections for next year were comparable to 2026.
"The organisation experienced a significant funding shortfall in 2025 and as a consequence was already compelled to undertake substantial workforce reductions," he said.
It would, however, be reforming "unjustified" policies affecting up to 1,000 staff, which had previously allowed them to remain employed during extended periods between assignments, he said.
"The budget constraints are real, but we are also moving forward with a comprehensive reform agenda to make UNHCR more agile, cost-effective, and accountable," he said.
AGENCY PLANS TO FOCUS ON EMERGENCIES
The agency has been particularly hard hit by donor cuts and has already been forced to reduce aid to refugees, cut thousands of jobs, close a Southern Africa office and is moving from its Geneva headquarters to a cheaper building in the city to save money.
Created in the aftermath of World War Two to help refugees fleeing war, persecution and violence, the agency relies almost entirely on voluntary funding, much of it pre-designated by donors for politically favoured projects in what many now see as a structural flaw.
The scale-back comes on the heels of the Trump administration weighing a potential split with the agency, although High Commissioner Barham Salih has since voiced hope the partnership will continue. Trump officials have also urged other nations to join a campaign to roll back asylum protections.
The UNHCR said in the budget documents it planned to prioritise helping refugees in emergencies, ensuring their protection, action on voluntary returns and promoting self-reliance.
BIGGEST CUTS TO THE AMERICAS
The planned budget for 2027 is $7.14 billion, the documents showed, down 16% from last year and the smallest budget in at least 10 years. The budget in 2025 was $10.6 billion.
However, the UNHCR's budget is seen as aspirational since it is rarely, if ever, fully funded.
The U.S., which sent a delegate to the Geneva meeting, was the top donor to UNHCR in 2025, giving over $800 million or nearly a quarter of the total contributions of $3.6 billion, the UNHCR website showed. That dropped to around $110 million this year.
Budgets will decline across all regions, with the Americas the worst affected and due to fall by almost a third to $485 million.
The other regions hardest hit were Asia Pacific, where some 1.2 million Rohingya refugees in Bangladesh already face worsening conditions, down 22%, and West and Central Africa, which hosts millions of refugees from Sudan's civil war, down 21%, the documents showed.
HOST COUNTRIES WORRIED
The cuts come despite a forecast for a record high 131.2 million displaced people in 2027, up from 129.4 million this year as conflicts such as Ukraine and Sudan persist, according to UNHCR projections, cited by diplomats.
Some states raised concerns at the meeting about both the impact of the cuts on refugees and how major refugee host countries, such as Uganda and Bangladesh, would pay for them, diplomats said.
"Everyone is fed up. But unravelling what is left of the system is even worse," one diplomat said.
But other diplomats said they welcomed the efforts to streamline the UNHCR's work in a difficult environment.
The planned budget is preliminary and is pending approval by the Executive Committee in October.
(Reporting by Emma Farge;Editing by Alison Williams)
