A record of a staff meeting at one of USAID’s primary contracting partners sheds light on the immediate impact of the U.S. aid funding freeze on the development community.
Also in today’s edition: What the aid freeze could mean for national security, and a major humanitarian data tool goes down.
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Worst-case scenario
Up to 3,000 Washington, D.C.-based professionals across the development sector will be out of a job by next week due to the fallout from the Trump administration’s stop-work order and freeze of U.S. foreign aid, according to the CEO of one of the world’s leading for-profit development contractors.
“Many of our competitors, most of our competitors — and I know this because I've met with their CEOs individually and collectively to share thoughts and approaches — are literally furloughing (leave without pay), or retrenching, 80%, 85% of their staff,” Torge Gerlach, CEO of DT Global, said on a call with Asia-Pacific staff members of the organization on Friday, according to a record obtained by my colleague Vince Chadwick. “We anticipate the impact in the Washington, D.C. area to be 2,000 to 3,000 development professionals … losing their jobs this weekend and next week. It is significant.”
DT Global has started terminating some of its own employees — notably Washington, D.C.-based operational support staff, Gerlach continued, not specifying a number as their all-hands meeting had not yet taken place. “We’re going to be part-timing the majority of the workforce for the foreseeable future.”
Around 20% of the firm’s total business is affected, Gerlach said, though he was optimistic the firm will survive the crisis. DT Global was USAID’s 11th biggest contractor in 2023, according to a Devex analysis, winning contracts totaling $79.8 million.
“This is extreme. We’ve never seen anything like this and it's well beyond our wildest expectations of what the worst case could have been coming out [of] the administration at this point,” Gerlach added.
Exclusive: Up to 3,000 DC aid workers laid off by next week, CEO says
Chaos unleashed
DT Global is not alone, of course. The global aid network is now teetering on the brink, wrestling with the fallout of U.S. President Donald Trump’s sudden policy upheaval.
The impact is profound, jeopardizing not only operational capabilities but also the lives of millions reliant on these services. Thousands of jobs are at stake, primarily affecting non-U.S. workers, and pushing some organizations toward bankruptcy to meet their financial obligations.
“I’ve got people crying. I’ve got people not knowing whether they have a job or not,” a leader of a major humanitarian organization, reliant on USAID funds, tells my colleague Elissa Miolene.
Amid this turmoil, many groups are paralyzed, terrified of making a wrong move that could invite severe consequences. This paralysis has shuttered operations, devastating local communities and eroding international trust. As the aid industry staggers under these hits, the aftershocks ripple out, reshaping community dynamics and global political landscapes alike. This scenario has morphed into not just a logistical quagmire but a deep moral quandary, as the foundational principles of humanitarian aid are threatened by the prevailing uncertainty and fear.
Read: ‘I don’t think anyone can survive for 90 days’ — aid's grim new reality
🎧 Listen: For the latest episode of our podcast series, Devex’s David Ainsworth, Adva Saldinger, and Sara Jerving discuss the latest updates on this rapidly evolving situation, and the long-term implications for the U.S. foreign aid infrastructure.
Gray areas
The abrupt order to halt USAID’s programming has left both staff and partner organizations confused about what happens next and what sort of expenses are considered legitimate, and therefore exempt, from the freeze.
On Thursday, USAID Acting Administrator Jason Gray tried to provide more clarity, telling the agency’s staff that the “Operating Expenses” and “Capital Investment Fund” accounts are not part of the foreign aid freeze, according to an email seen by Sara.
He wrote that operating units may fund “on a temporary basis, salaries, benefits and related administrative expenses,” to include leases, residential and office maintenance, approved travel, utilities, internet, cell phones, vehicle maintenance, among other expenses.
Scoop: USAID issues guidance on operating expenses exempt from freeze
Having trouble keeping up with all the development work upheavals caused by the funding freeze? We’ve created an up-to-date guide to track the impact for you. Check it out here.
Blowing a FEWS
FEWS NET, a crucial USAID-funded early warning system for predicting famine, has unexpectedly gone offline, thanks to Trump’s foreign aid freeze. Dubbed the “Bible” of humanitarian planning by aid workers, FEWS NET has been a lifeline for nearly 30 countries in assessing food insecurity threats. From monitoring weather patterns to food prices, this tool is pivotal in strategic aid deployment decisions, writes my colleague Jesse Chase-Lubitz.
But as of yesterday, anyone trying to access its comprehensive data or send an email was met with the digital equivalent of “Sorry, we’re closed.” Managed by the American Institutes for Research, FEWS NET was pulled as part of the broader stop-work order, leaving many in the humanitarian sector scrambling and more than a little miffed.
As USAID reassesses its projects to align with Trump’s “America First” agenda, vital tools like FEWS NET hang in the balance, with no clear indication of when — or if — they'll return.
Read: USAID-funded famine early warning system goes offline due to aid freeze
+ For the inside track on how agriculture, nutrition, sustainability, and more intersect to remake the global food system, sign up for Devex Dish, a free, weekly newsletter.
Defending who now?
The U.S. government is cracking down on “gender ideology,” with a new mandate requiring all federal agencies, including USAID, to scrap any related programs and policies, Elissa writes.
Charles Ezell, acting director of the Office of Personnel Management, or OPM, issued a memo titled “Initial Guidance Regarding President Trump’s Executive Order Defending Women.” Agencies must halt gender-focused training, remove gender options beyond male and female from forms, and erase the term “gender” from documents, replacing it with “sex.”
All staff working on gender issues are to be put on paid leave. Additionally, features like pronoun prompts in email systems are to be disabled. By Thursday, significant content — like USAID’s gender equality pages — had vanished from websites. Agencies have until Feb. 7 to submit a full compliance report to OPM.
Scoop: US government issues guidelines on ‘defending women’
Canary in the coal mine
The U.S. State Department now has access to USAID’s Google Drive, enhancing collaboration but raising concerns about increased oversight, according to an email seen by Devex. A document reveals that this integration aims to bolster national security and streamline efforts between the two entities. Meanwhile, USAID’s tech teams are developing features to boost interagency communication.
However, some insiders speculate that this could lead to greater State Department control over USAID.
In other news
Israel’s ban on UNRWA’s operations took effect Thursday, but the U.N. agency says it will continue its work in the Palestinian territories. [Al Jazeera]
Switzerland announced Wednesday it will be ending its bilateral development programs in Albania, Bangladesh, and Zambia, after its parliament cut CHF110 million ($121 million) from its aid budget for 2026-2028. [Swissinfo]
The United Nations human rights office is requesting $500 million to support its global work in 2025. [Reuters]
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About the author
Helen Murphy
Helen is an award-winning journalist and Senior Editor at Devex, where she edits coverage on global development in the Americas. Based in Colombia, she previously covered war, politics, financial markets, and general news for Reuters, where she headed the bureau, and for Bloomberg in Colombia and Argentina, where she witnessed the financial meltdown. She started her career in London as a reporter for Euromoney Publications before moving to Hong Kong to work for a daily newspaper.
