The cost-cutting team of Elon Musk is completing plans to shut down the U.S. Agency for International Development (USAID), leading to the dismissal of thousands of American diplomats, civil servants, and local workers assigned to the agency overseas, according to two former senior USAID officials and a source familiar with the matter. On Friday, Congress was informed that nearly all USAID employees will be let go by September, its overseas offices will be closed, and some of its functions will be transferred to the State Department. This latest decision by Musk’s Department of Government Efficiency will effectively dismantle what remains of the agency’s workforce.

“This is definitely the final closing out,” said a former senior USAID official.

In February, President Donald Trump, along with Musk, whom he appointed to oversee government cost-cutting, initiated the process of shutting down USAID and merging its functions into the State Department to align with Trump’s “America First” policies. The State Department has not yet replied to requests for remarks. According to former officials and a source familiar with the matter, who spoke anonymously, USAID’s human resources office informed regional bureaus in a conference call that layoff notices would be sent to over 10,000 locally hired foreign nationals, effective in August.

A former official stated that the call took place on Monday and warned that terminating local staff could potentially violate labour laws in the countries where they are employed. Additionally, notices will be issued to U.S. diplomats and civil servants working abroad for USAID, which has been a key provider of U.S. foreign aid for over six decades.

Trump has alleged, without providing evidence, that the agency was full of fraud and controlled by “radical left lunatics,” while Musk has falsely labelled it a “criminal” organisation.

Thousands of USAID employees were placed on administrative leave after receiving layoff notices on Friday, while hundreds of contractors were dismissed, and over 5,000 programs were shut down. This has significantly disrupted global humanitarian aid efforts that millions rely on.

According to the non-partisan Congressional Research Service, USAID operates in more than 60 countries, with most of its funding allocated to humanitarian and health programs. Key beneficiaries include war-affected Ukraine and the Democratic Republic of Congo, as well as U.S. ally Jordan and regions such as the Israeli-occupied West Bank and conflict-ravaged Gaza. A conference call summary, reviewed by Reuters and shared by a regional bureau, confirmed that all locally hired foreign nationals , along with American diplomats and civil servants working with USAID overseas, had been dismissed.

The report stated that over 600 U.S. diplomats are currently on secondment to USAID overseas, though it did not specify the number of U.S. civil service members. Most of these positions are set to be terminated in July to shut down “all programmatic work.”

The summary states, “Every position eliminated; 100 per cent of the agency is rif’d (Reduction in Force) or will be,” meaning no employees will be retained. It also advised personnel to “focus on things to make sure you’re getting the right benefits.”