USAID Funding Cut Triggers Job Losses, Shocking Development Workers

USAID Funding Cut Sparks Job Losses, Uncertainty in Development Sector

Saiful Alam (a pseudonym) has dedicated over 15 years to the development sector, managing finances for foreign-funded projects in Dhaka. However, at 47, he now faces an unexpected crisis—sudden unemployment. With no alternate income source, he and his family may soon be forced to leave the capital, where his two children are enrolled in a reputed school.

His job loss follows the US Agency for International Development’s (USAID) recent termination of the project he had been working on for three years.

"I am currently finalizing accounts and preparing the necessary paperwork for submission to USAID in Washington," Saiful told The Daily Star. "Once that is done, I’ll give myself a month to find another job. If I don’t succeed, I’ll have no choice but to return to my village."

Despite his extensive experience in development finance, Saiful fears opportunities in the shrinking sector are scarce.

"My entire career has been in development projects, but the industry is collapsing. I doubt I’ll find another job in this field, and a private company is unlikely to hire me at a senior level," he said.

The thought of relocating to his village is daunting. "It will be extremely difficult for my family and children to adjust. I don’t know what I’ll do for a living or where my children will continue their education. It’s frustrating," he added.

Widespread Impact on the Sector

Saiful's plight reflects a larger crisis. USAID’s decision to cancel most of its nearly 100 projects in Bangladesh has left tens of thousands of development professionals facing unemployment. These projects, implemented by around 400 NGOs, have long provided jobs and supported critical initiatives across the country.

Although no official data exists on the exact number of job losses, sector experts estimate that 30,000 to 40,000 people may be affected.

Diplomatic sources indicate that USAID annually contributes between $300 million and $400 million to Bangladesh for health, nutrition, agriculture, livelihoods, labor rights, human trafficking prevention, and democratic development.

However, following Donald Trump’s inauguration as US president on January 20, his administration ordered the suspension of USAID-funded projects worldwide—except for emergency food aid, including assistance for Rohingya refugees in Bangladesh.

All American personnel from USAID’s Bangladesh office have been placed on administrative leave, with some working to transfer documents to Washington DC.

On February 25, the Trump administration terminated approximately 10,000 NGO contracts globally, cutting over 90% of foreign aid agreements and slashing $60 billion in funding.

Shock and Uncertainty Among Development Professionals

Saiful, who was working on an education project, initially believed that Trump’s funding cuts would target climate change, gender equality, and immunization projects, considering his administration’s policies.

"We were preparing responses to USAID’s queries about our project's alignment with US policies. But before we could submit them, we received the termination letter," he said.

Another development professional working on inclusive finance described the growing uncertainty among NGO workers in Bangladesh.

"With USAID terminating projects and European countries prioritizing security funding due to the Ukraine-Russia war, this will be a difficult period for the sector," he noted.

A health project official raised concerns about the impact on vulnerable communities. "Imagine the consequences for poor people relying on medical support projects, including vaccination programs," he said.

The official cited the termination of over 1,000 employees at icddr,b following the USAID decision. He also noted that USAID supported essential medicine and birth control projects, which for-profit companies are unlikely to produce.

Nazma Akter, Executive Director of Awaz Foundation, said her organization had been implementing two US-funded projects that have now been canceled, leaving over two dozen employees jobless.

"We worked to promote labor rights and support workers' legal cases. The US government has always advocated for labor rights, yet it has now withdrawn funding. This only gives employers more opportunities to exploit workers," she told The Daily Star.

Government Response and the Road Ahead

NGO Affairs Bureau Director General Anwar Hossain acknowledged the crisis and said discussions were underway with a forum of NGOs implementing USAID-funded projects.

"The large-scale job losses are a serious concern. We are urging NGOs to absorb as many affected employees as possible into other projects," he said.

The bureau is also preparing a report on the impact of USAID’s funding cuts for the government.

Several development professionals believe the government should rethink how NGO activities are carried out.

A health expert suggested that the government should take over essential programs previously funded by foreign donors, such as birth control and immunization initiatives.

Professor Abu Eusuf of Dhaka University’s Development Studies Department noted that project-based activities often lack sustainability. "The USAID funding withdrawal should be a wake-up call for Bangladesh to become more self-reliant," he said.

"We must focus on job creation, business promotion, and skill development for both local and global markets," he added.