USAID’s largest partners report furloughs for thousands of staff

For more than 50 years, FHI 360 has reached thousands across the world. In Ethiopia, that has meant treating children suffering from malnutrition; in Ukraine, that’s meant bringing mobile medical clinics to communities with bombed-out hospitals. Those programs were funded by USAID, the agency which, three weeks ago, was the largest bilateral donor in the world. But over the last three weeks, USAID has been brought to pieces. And day by day, its partners have gone down with it. FHI 360 is just one of countless organizations to be hit, furloughing 36% of its staff — including 200 in its North Carolina headquarters — last week alone. “Most leaders are in firefighting mode,” said Kim Kucinskas, a director at the nonprofit group Humentum. But at the same time, she said, organizations have had to continue to ensure they’re keeping on top of other programs not funded by the U.S. government. “It’s this balance between crisis management, and needing to keep the trains running on time.” Today, eight organizations — including some of USAID’s largest contracting partners, DAI and Chemonics International — sued President Donald Trump, USAID, the U.S. Department of State, and others for “irreparable harm” in the wake of USAID’s dismantling. In the lawsuit, the organizations laid out the damage: DAI, for example, has furloughed between 65% and 70% of its workforce — some 383 employees — and reduced salaries for senior staff members by 20%. Democracy International, a nonprofit focused on democratic governance, has furloughed 100% of its 95 U.S.-based employees and placed 163 staff members overseas — 92% of those abroad — on administrative leave. And Chemonics International, an organization that was once a USAID contracting powerhouse, has furloughed 750 of its U.S.-based staff — more than 63% of its American workforce — and reduced the hours of another 300. “These programs cannot simply be restarted on command,” the lawsuit states. “USAID’s partners are hemorrhaging resources and employees.” The list goes on. Management Sciences for Health, a Virginia-based nonprofit, has furloughed half its U.S. staff, with the court filing stating the organization may soon terminate another 1,000 employees abroad. HIAS, a nonprofit focused on refugee resettlement, has laid off 500 of its international staff. There are reports of deep cuts at Catholic Relief Services and Resonance, a Vermont-based contractor, has laid off all but a dozen of its 100-person workforce. The International Republican Institute, or IRI — a nonprofit focused on freedom and democracy — has also been forced to furlough two-thirds of its workforce, some 200 people. More are expected to follow, and IRI is now shutting down more than 20 of its offices overseas, according to someone with knowledge of the organization’s internal decision-making. USAID Stop-Work, a coalition of former, current, and affiliated USAID staff, has counted more than 11,300 American jobs lost across 43 states — and nearly 52,000 across the world. “Without having money in place, organizations have had to lay off staff and or stop procurement orders for essential products, and that is not something that can just be turned back on if money were to become available,” said one former USAID official, who spoke during a virtual press conference assembled by USAID staff last week. “This has resulted in consequences for every region in the world.” Smaller organizations often receive lines of credit from USAID, which they draw on to do the contracted work. Larger organizations often do that contracted work, and then invoice USAID for reimbursement. With USAID’s payment system frozen since last month, both systems have been broken. In Central America, that means shelters previously supporting young people fleeing gang recruitment are now closed; across the world, that means $150 million of health commodities, including antiretroviral medications, are stranded in warehouses. “It’s in the hundreds of millions of dollars owed for services already provided, and of course, some multiples of that when it comes to what is being asked to be floated during the 90-day review,” said Tom Hart, the president and chief executive officer of InterAction. “That’s why at least in the INGO sector, we’re seeing mass layoffs, country programs stopped, and some organizations looking at shutting their doors.” Organizations have been forced to shift money around to cover costs or lay off staff to save on program expenses. And for many of USAID’s largest partners, that means they’re out millions of dollars for work they’ve already done. The Professional Services Council, or PSC, a trade association of more than 400 government contractors, said federal agencies currently owe its members some $500 million in unpaid work. Humentum surveyed 100 organizations to ask the same, finding that nearly three-quarters of respondents said their organization had not been paid for work completed before Jan. 24. The court filing breaks things down further: DAI is owed $120 million for work completed before the stop-work order began while Chemonics is out $103.6 million for the same. “What happens when those invoices are not paid?” said PSC’s president, David Berteau, in a press release. “Without reimbursement for funds already disbursed, companies will run short of cash.” Earlier today, Kucinskas gathered human resource leaders for Humentum’s people and culture roundtable, a regular convening of those across the global development space. The mood was heavy as organizations compared how they were making their calculus, Kucinskas said. “Some said: I’ve been around for a while, and have been through crises before,” she added. “But this is a whole other level. It’s physically, emotionally, mentally exhausting.”