Logo of the ICRC is seen during the press conference in Geneva, Switzerland, September 11, 2023. REUTERS/Denis Balibouse

By Emma Farge

GENEVA (Reuters) -The International Committee of the Red Cross will reduce its 2026 budget by nearly a fifth to 1.8 billion Swiss francs ($2.2 billion) and cut 2,900 jobs, it said in a statement on Friday, as its top donor the United States and others pare back support.

Aid budgets face a huge shortfall as donors shift their focus towards defence, forcing humanitarians to make difficult decisions about whom to help amid multiple conflicts and record displacement.

At the same time, the top global aid contributor, the United States, is overhauling its foreign assistance programmes under President Donald Trump as he prioritises "America First" policies.

The job cuts amount to about 15% of the ICRC's global staff of 18,500.

'UNPRECEDENTED' FUNDING CRISIS

The Red Cross, which already underwent belt-tightening in 2023, described to Reuters the situation facing the sector as a "financial crisis of unprecedented proportions".

The U.S. remains the organisation's top contributor, a spokesperson confirmed, but has reduced its support this year, as have other traditional donors such as Britain and Germany.

The measures, which also include the merging of departments, are designed to improve efficiency and prioritise the organisation's work in helping those in conflict zones, the statement said.

It would remain present in places such as Sudan, Ukraine, Israel and the occupied territories and the Democratic Republic of Congo despite the reduced budget, it added.

"The ICRC remains committed to working on the front lines of conflict, where few others can operate," said President Mirjana Spoljaric after a meeting of its assembly.

"But the financial reality is forcing us to make difficult decisions to ensure we can continue to deliver critical humanitarian assistance to those who need it most."

A third of the job cuts will be made through voluntary redundancies and leaving vacant posts open, the statement said. About 200 of the staff cuts are in the Swiss city of Geneva, where the organisation began in 1863, a spokesperson said.

The humanitarian body is present in more than 90 countries and its activities range from providing basic humanitarian aid to visiting prisoners of war.

It acts as a neutral intermediary in conflicts and oversaw the transfer of hostages from Gaza as well as Palestinian prisoners under the terms of an October 10 ceasefire.

($1 = 0.8054 Swiss francs)

(Reporting by Emma Farge; Editing by Ludwig Burger, Miranda Murray and Alex Richardson)