The United Nations' global organization for the promotion of labor rights has warned that it faces a funding crisis and could be forced to shed around 8 percent of its workforce unless member states pay their fees.

Reuters has reported seeing a document sent to workers at the International Labour Organization, or ILO, by its Director-General Gilbert Houngbo that warns of a "critical" financial situation.

Various remedies are being considered, including moving workers out of its headquarters in the Swiss city of Geneva, before proposals are put to the organization's governors next month.

"With arrears from several member states totaling over 260 million Swiss francs ($323.4 million) — about a third of the biennial assessment — the cash flow situation has become critical," the document says. The United States, which is the ILO's largest donor, contributing around 22 percent of its budget, is believed to owe around 173 million francs.

Restructure proposals to try and bring ILO costs down are in addition to a wider plan by UN Secretary-General Antonio Guterres to reduce the UN's normal budget by 15 percent.

On its website, the ILO describes its mission as "advancing social justice, promoting decent work". China was a founding member when it was established in 1919 as part of the Treaty of Versailles at the end of World War I, decades before the UN came into being, and the ILO won the Nobel Peace Prize in 1969 for building peace through social justice.

This summer, Houngbo delivered a video opening address at the 2025 World Youth Development Forum in Suzhou, in which he praised the long-standing partnership between the ILO and forum organizer the All-China Youth Federation.

The ILO's financial reserves are only sufficient to pay workers up to the end of the year if other outgoings are reduced. So far this year, reductions in funding from the US have already resulted in 225 jobs being lost at the ILO's headquarters, and in a worst-case scenario, up to 295 more could be lost in the name of financial savings.

However, it is hoped relocating jobs from Geneva to Italy, moving Europe and Central Asia roles to the Hungarian capital Budapest, and redeploying Arab state workers from Beirut to Doha could all make savings, in addition to freeing up office space in Geneva that could be rented out to make money.

In a statement to Reuters, the ILO said "as the director-general has underlined, every effort is being made to avoid involuntary staff members terminations, but this scenario cannot be entirely ruled out if the financial situation does not stabilize".

A resolution issued by the ILO workers' union expressed "profound concern" about the financial situation and proposed remedies, and added that management had not participated in "good faith social dialogue" about possible solutions.