The move, which is likely to be welcomed by the UN's critics, may be announced this morning by the Secretary-General, Boutros Boutros-Ghali, in testimony to a committee on financial reform.
Officials denied reports yesterday that as many as 1,500 jobs would be lost, but yesterday's Washington Post said that "a massacre" was possible among the UN's 14,000 professional and clerical workers.
Mr Boutros-Ghali has been urged to take drastic action by the Under-Secretary- General charged with overseeing UN finances, Joseph Connor, an American. He has warned a budget deficit of $2.1bn (pounds 1.3bn) means the UN will run out of funds by April.
A memorandum to the Secretary-General from the UN's finance committee concluded the cash crisis was a "politically inspired financial collapse". Half of the money the UN is missing is owed by the US.