‘Dire’ financial crisis forces UNRWA to drop hundreds of ex-Gazan staff from payroll

GENEVA, Switzerland — The UN’s beleaguered agency for Palestinian refugees said that a “dire” financial crisis had forced it to remove hundreds of Gazan staff members who had left the territory from its payroll.

“On Tuesday, 571 local UNRWA staff, outside Gaza, were informed that they were being separated from the agency with immediate effect,” a spokesperson told AFP in an email last week.

For more than seven decades, the United Nations Relief and Works Agency for Palestine Refugees has provided aid and assistance to Palestinian refugees across Gaza, the West Bank, Lebanon, Jordan, and Syria.

But the agency has seen the voluntary contributions it relies on dwindle as it has become the focus of increasingly harsh Israeli criticism over its role, causing what the spokesperson called an “unprecedented financial crisis.”

Israel has alleged that more than 10 percent of UNRWA’s staff in Gaza have ties to terror groups, that members of its staff took part in the October 7, 2023, invasion and massacre in southern Israel, and that educational facilities under the organization’s auspices consistently incite hatred of Israel and glorify terror.

While the work UNRWA was mandated to do cost around $880 million in 2025, the agency received only around $570 million in contributions, the spokesperson said.

“As things stand, we expect a substantial shortfall in 2026,” they added.

All of the staff affected by last week’s announcement had originally worked in the Gaza Strip, but had managed to leave early in the war sparked by the Hamas-led invasion of southern Israel on October 7, 2023.

Hamas on Wednesday slammed the decision as “unjust and a violation of the fundamental rights of these employees.”

“We call on UNRWA… to assume its role and responsibilities towards the Palestinian people and its employees,” it added.

‘Intense defamation’

Most had been unable to carry out their duties remotely since leaving Gaza, but had remained on UNRWA’s payroll until last March, when they were placed on exceptional unpaid leave, the spokesperson said.

“The affected staff have been without pay for over 10 months, and it is impossible to foresee when or if they could resume their duties due to circumstances entirely beyond UNRWA’s control,” the spokesperson said.

“Recognizing that UNRWA’s financial situation remains dire, the agency took a decision which at least allows them to access financial resources rapidly, including separation indemnities.”

The spokesperson stressed that UNRWA, which has seen more than 300 of its employees killed in Gaza since the start of the war, still had around 12,000 staff working inside the Palestinian territory.

The decision was “extremely difficult and (came) as a result of an extremely challenging financial outlook, as well as intense defamation campaigns to undermine UNRWA and deter its donors”, the spokesperson said.

The day after layoffs were announced, its chief Philippe Lazzarini said on a visit to the Turkish capital that UNRWA is to open an office in Ankara within weeks.

“We have signed the final agreement with the government of Turkey and this time it has been also endorsed by the parliament,” he told reporters, adding that it was “a question of weeks” until it opened.

Israel has barred UNRWA from operating on its soil, accusing the agency of providing cover for Hamas terrorists, and claiming that some of the agency’s employees took part in the October 7 attack that killed over 1,200 people, mostly civilians, and saw hundreds abducted to Gaza as hostages.

In February 2024, the IDF revealed the existence of a subterranean Hamas data center directly beneath UNRWA’s Gaza Strip headquarters. The IDF has also repeatedly targeted Hamas command centers and gunmen hiding out in UNRWA schools.

Freed hostage Emily Damari said after returning to Israel that she had been held in captivity in UNRWA schools and facilities, a claim the agency said it took “extremely seriously.”

Israel has provided evidence that a dozen UNRWA employees were involved in the deadly 2023 attack and insists that other agencies can pick up the slack to provide essential services, aid and reconstruction — something the UN and many donor governments dispute.

A series of non-Israeli investigations found some “neutrality-related issues” at UNRWA, but stressed that Israel had not provided conclusive evidence for its headline allegation.

Rejecting Israeli allegations, the International Court of Justice issued an advisory opinion in October last year asserting that Israel is legally obligated to allow the agency to provide humanitarian aid in Gaza, and stating that the provision of aid to the Strip during the war there has been inadequate.

The UN General Assembly endorsed the court’s view last month. Israel, meanwhile, passed a law prohibiting the provision of electricity or water to facilities owned by or operated on behalf of UNRWA.

The government-backed legislation requires electricity and water providers to withhold or disconnect service from UNRWA facilities, as well as block the provision of communications and banking or financial services to the agency.