On January 20, 2025, President Trump issued an executive order establishing the Department of Government Efficiency under Elon Musk. Just days later, on February 3, DOGE closed the Washington headquarters of the U.S. Agency for International Development and moved to fold USAID into the State Department under Secretary of State Marco Rubio. On February 3, according to CNN, the president called USAID’s leaders “a bunch of radical lunatics” and Musk called the Agency “beyond repair”—not “an apple with a worm in it, [but] a ball of worms.”

As of early February, it remains too soon to know how this shake-up will end up. It may be paused or ultimately undone such that USAID will continue to function. But eliminating or even shrinking USAID would inevitably disrupt USAID grantees’ projects across the developing world. And so every American-headquartered non-profit and NGO that relies on significant USAID funding for its overseas programs may be facing an existential crisis—or, at least, the possibility of a radical defunding.

Any non-profit and NGO that gets most or all of its funding from USAID urgently needs a plan for how the organization might survive and continue operating through 2025. And even those USAID grantees that receive only some of their funding from the Agency need a plan for how their USAID-funded programs might survive and continue operating internationally in 2025.

As USAID-funded organizations scramble to account for what the Agency shake-up will mean for their global operations going forward, they explore various strategies: Secure alternate funding? Launch a global restructuring? Shut down at least some international programs? USAID grantees confronting bet-the-organization scenarios after the DOGE disruption must wrestle with a number of intractable challenges—one of which, inevitably, will be overseas employment law compliance: What is a USAID grantee to do about its overseas staffers after their funding runs out?

A USAID grantee survival plan needs, among other planks, a coherent approach for what the organization will do about its overseas team—its foreign payrolled employees, its international Employer-of-Record staff and its worldwide independent contractors: Keep on employing and engaging them? Cut their hours? Cut their pay rates? Furlough/suspend them? Or lay them off, doing an international “retrenchment” or “collective redundancy”?

After making these tough decisions comes the question: How? Employment-at-will tends not to exist outside the United States. Particularly overseas, in the developing world, changes like cutting hours, furloughing or suspending staff and laying employees off may trigger challenges significantly more complex than the way these same issues would play out in the United States.

USAID-funded non-profits and NGOs may seek time and perspective to work up a response to DOGE’s USAID restructuring, but there is no time—this problem is already on the front burner, on high flame. At a non-profit, when funding stops, making payroll fast becomes impossible.

Solutions to this problem will differ, because different organizations with different missions operating different programs in different countries under different models inevitably make different decisions. But every USAID grantee at risk of losing its funding needs to confront a single set of challenges relating to reducing staffing costs overseas. Here is a six-point checklist for how to do that:

1. Outline a high-level global retrenchment strategy. Work up a global retrenchment strategy that accounts for uncertainty by staking out fall-back positions. While a given USAID grantee may have to retrench in different ways across its different countries, start by embracing a top-down/big-picture approach, rather than trying to address myriad local concerns. Craft a global retrenchment strategy that addresses tough questions across all the organization’s affected countries: Can we continue to engage and fund outside-U.S. staff in 2025? Should we begin by exploring alternatives to layoffs—like reassignments, hours cuts, pay cuts or securing alternate funding? Or must we cut back, suspend, shut down or downsize some or all of our overseas programs? If so, what do we do about the people overseas who staff our foreign programs?

2. Get ahead of overseas staff communications. While U.S. employees at USAID-funded organizations may be close to news about these activities, teams abroad may be in the dark and receptive to rumors. Expect rank-and-file overseas staffers to thirst for news about what the DOGE disruption of USAID means for their organization’s local programs in their country. Of course, for an employer to launch proactive global internal communications might seem impossible before there is yet anything meaningful to say and while the organization seems to have no coherent message yet to deliver. But get ahead of, and stay on top of, the communications challenges here. Keep worldwide teams informed even as the only message is that U.S. headquarters is still working through this, and USAID funding remains up in the air.

3. Determine which overseas positions link to USAID funding. If overseas retrenchments become necessary, local law abroad will impose on the employer a duty to prove that affected staff’s wages actually were USAID-funded. So isolate, now, precisely who overseas demonstrably works a USAID-funded position. In each country and each overseas program, identify which specific jobs are directly attributable to USAID money—unless, necessarily, all of them are. Then document how each position’s wages are USAID-funded.

4. Review “continued-funding” clauses. Check whether incumbent staffers working USAID-funded jobs have signed onto “continued-funding” provisions—clauses in employment and independent contractor agreements that link continued service to continued funding. (These clauses are fairly common in non-profit grant-funded overseas operations.) Obviously, an affected team member who contractually committed to a provision like this has expressly linked the position to USAID funding. Organizations are advised to review operative agreements to check whether the organization enjoys the leverage of continued funding clauses and to understand exactly what any continued-funding clauses allow.

5. Work up a retrenchment plan. If overseas staff cut-backs seem likely but it is still too soon to make final decisions, consider what form an overseas retrenchment might have to take. Work up a priority of what the first wave of cut-backs in affected overseas countries and programs would look like: Hours cuts, or pay cuts, or furloughs and unpaid suspensions—or layoffs? Which staff (who) would be first affected? Can the organization consolidate positions? Should overseas payrolled employees get priority over independent contractors and “Employer-of-Record” staff? Should the organization recall and repatriate any U.S. expatriates currently on overseas assignment?

6. Craft an implementation strategy. Work up feasible, legally compliant approaches for implementing the retention plan internationally. In many countries, local law offers a clear path for how to lay off employees for lack of work—but local law can be murky as to how to take steps short of that (imposing hours cuts, pay cuts, furloughs, unpaid suspensions). That means taking less-severe steps might actually require more work: timely consultation with affected employees (or their representatives); drafting employee consent forms enforceable under local law; convincing staffers to opt in. Overseas workplace consultation obligations may require advance notice to government labor inspectors or meeting with a local labor inspector before doing a retrenchment. Remember to address layoffs of non-traditional staff (dismissing overseas Employer-of-Record workers requires involving the EOR company; terminating independent contractors triggers contractual termination clauses and can spark misclassification claims). Work through these issues now—before they surface in “real time.”

As of early February 2025, there is no telling how the DOGE USAID shake-up will play out. The landscape might change abruptly and worst-case scenarios might yet be avoided. Optimistically, maybe USAID grantees will ultimately shore up federal funding and weather this storm without having to impose significant personnel cuts in the United States or abroad. But it is equally possible that we may be on the verge of the most severe crisis that many USAID-funded organizations have ever faced. Either way, at this point every USAID-funded non-profit and NGO needs to strategize—now—about what measures it might have to implement across its worldwide programs, in a worst-case scenario. Consult with counsel sooner rather than later, toward the goal of developing a contingency plan.