GENEVA (Reuters) -The International Committee of the Red Cross will reduce its 2026 budget by 17% to 1.8 billion Swiss francs ($2.23 billion)and cut 2,900 jobs, it said in a statement on Friday.

Aid budgets are facing an unprecedented shortfall as donors shift their focus towards defence, forcing humanitarians to make difficult decisions about whom to help amid multiple conflicts and record displacement.

At the same time, the top global aid contributor, the United States, is overhauling its foreign assistance programmes under President Donald Trump as he prioritises 'America First' policies.

"The ICRC remains committed to working on the front lines of conflict, where few others can operate," said President Mirjana Spoljaric after a meeting of its assembly.

"But the financial reality is forcing us to make difficult decisions to ensure we can continue to deliver critical humanitarian assistance to those who need it most."

The job cuts amount to about 15% of the ICRC's global staff of 18,500 and follows previous belt-tightening measures in 2023.

A third of them will be made through voluntary redundancies and leaving vacant posts open, the statement said.

The Geneva-based humanitarian body is present in more than 90 countries and its activities range from providing basic humanitarian aid to visiting prisoners of war.

It acts as a neutral intermediary in conflicts and transferred hostages from Gaza as well as Palestinian prisoners under the terms of the October 10 ceasefire.

($1 = 0.8054 Swiss francs)