Trump's foreign aid cuts are killing jobs for US contractors too

WASHINGTON — Weeks after Donald Trump won reelection, Keith Ives held an all-staff meeting at his Denver-based company to reassure his 30 employees that their work evaluating the success of U.S. aid projects overseas wasn’t under threat.

“I enthusiastically told them, ‘I’m not worried at all — the work we do isn’t political,’” said Ives, who founded Causal Design more than a decade ago. “We weren’t working in climate. We’re not working in gender. We’re not doing DEI work. We’re monitoring and evaluating emergency food aid.”

But President Trump’s administration quickly froze all foreign aid spending, dismantled the U.S. Agency for International Development and halted payments to contractors including Ives’ company, which examines USAID projects to better understand their effect.

He and other contractors are trying to get paid by challenging the freeze in court. But he thinks the company will probably have to go out of business, eventually costing the jobs of all 30 employees.

“I don’t see a way out of this,” said Ives, a Marine Corps veteran who served in Iraq.

Although attention in Washington has turned to other funding cuts and other issues — such as tariffs — the aftereffects of the USAID’s dismantling are still rolling through organizations and companies that it funded.

Ives’ story is playing out at companies large and small across the U.S. that put into action or monitored thousands of USAID programs that were officially terminated in February. It’s an example of how Trump’s push to cut government spending — which is targeting tens of thousands of government workers — is eliminating thousands of U.S. jobs in the private sector too.

The aid and development sector now stands to lose as many as 50,000 U.S.-based jobs, with about 19,000 of these positions already terminated, according to a tally by Molloy Consultants, which is seeking to mobilize opposition to the aid cuts.

These “implementing partners” oversaw USAID projects around the world that set up health clinics, distributed food aid or medicine, fought malaria and monitored disease outbreaks.

In many cases, their assigned mission has been to help USAID and other agencies avoid wasteful or ineffective spending, seemingly in keeping with Trump and billionaire adviser Elon Musk’s vision to eliminate waste, fraud and abuse at USAID and across the government.

The Trump administration’s cuts have slashed the contractor base from about 2,500 companies and nonprofits to about 300, according to calculations by Charles Kenny, an expert at the Center for Global Development in Washington.

Attempts have been made in the past to revamp processes at USAID and funnel more money to organizations in the countries receiving aid. But experts say the dominance of U.S. companies and high overhead costs are a consequence of stringent federal regulations to ensure foreign aid isn’t misspent.

These operations were “home to the skills and expertise needed to manage U.S. foreign assistance contracts and follow all of the byzantine rules that govern them,” Kenny said.

Trump administration officials have heaped scorn on the category of companies that includes Causal Design. Pete Marocco, Trump’s appointee to oversee the dismantling of USAID, helped terminate 5,300 USAID contracts and has criticized the dominance of contractors that he said have “enriched themselves and guarded their turf” in an “aid industrial complex.”

The administration’s supporters want to bypass these organizations, sometimes criticized as “Beltway bandits” despite profit margins of 5% or less.

Experts suggest that may be impossible. While USAID teams deploy for crises like Myanmar’s recent earthquake, the outside contractors normally handle complicated multiyear contracts in poor countries and often-dangerous relief work in war zones such as Gaza and Ukraine that advance US foreign policy goals.

“USAID is the linchpin of an American private-sector partner network that enhances U.S. power and influence,” Jim Kunder, the agency’s former deputy administrator, wrote in a letter to Republicans on Capitol Hill that was seen by Bloomberg. “Eviscerating this USAID private sector network both destroys American jobs and diminishes America’s visibility, influence, security and power.”

The State Department, which is absorbing what’s left of USAID, declined to comment.

Chemonics International Inc., one of the biggest contractors, received about $4.5 billion in USAID contracts from 2013 through 2022, according to the Congressional Research Service. But the company has seen its workload cut from 104 contracts to 10 and has already furloughed about 780 of roughly 1,000 U.S.-based staff, according to a person familiar with the reduction who wasn’t authorized to speak publicly.

DAI Global LLC, another major contractor, received almost 80% of its revenue from USAID — more than $750 million in 2024 — and saw 98 projects across 45 countries affected by the administration’s stop-work order, according to court documents.

The funding freeze affected company projects including a shelter to keep minors out of criminal gangs in Central America, cybersecurity in Ukraine and efforts to track and contain animal-born diseases in Bangladesh, the documents indicated. The company recently furloughed more than 600 U.S.-based staff, according to a company spokesperson.

“The reality is there’s no one else that can do some of these things except big federal contractors,” said Andrew Natsios, who served as USAID’s top official under President George W. Bush. “The president’s going to have a crisis, I’ll tell you right now, and he’s going to turn and say, ‘Well, who’s going to do this?’”

Given the job losses and funding void left by USAID, which managed $43 billion in projects in 2023, many employees working in development are contemplating leaving the sector entirely. Foreign aid cuts in the U.K. and Europe are making that worse.

Mary Faith Mount-Cors owns a North Carolina-based business, EdIntersect, that works on education policy in the developing world. She saw two projects in Tajikistan and Malawi terminated and may have to dismiss her team of about a dozen people.

“There’s nothing solid to stand on to survey the terrain, it’s just like you’re sinking,” she said. “People are looking at other avenues because these are shutting. People are starting to think, ‘Could I do something in some other connected area that maybe won’t get erased overnight?’”