ICANN's responsibility is to serve the public interest by fulfilling our mission to ensure the stable and secure operation of the Internet's unique identifier systems. Together, the Board, community, and organization (org) have achieved 25 years of success. Our commitment to the long-term sustainability of the single, globally interoperable Internet is more critical than ever.
In December 2023, ICANN org presented the draft ICANN FY25 Budget for public comment, which continued through mid-February 2024. The FY25 budget was finalized in April and subsequently adopted by the Board of Directors on 5 May 2024.
As detailed in the ICANN FY25 budget, ICANN's operating expenses for FY24 and FY25 are projected to be higher than anticipated. This is due to persistently high inflation, leading to higher overall costs, including a 20% increase in travel expenses. Additionally, ICANN's funding has been recently stagnant and is now expected to slightly decline in FY25. As a result, projected operating expenses for FY24 are expected to exceed projected funding, leading to a deficit for this fiscal year. With stable funding and inflation-driven expenses, ICANN is in a structural deficit position.
During FY24, the ICANN organization (org) has taken ongoing action to reduce and carefully manage expenses, including a 30% reduction in staff travel. However, approximately $10M of cost reductions per year are needed to balance the budget going forward. As a result, the ICANN Executive Team, with the support of the Board of Directors, is taking steps to address the structural deficit, which includes several difficult decisions.
Effective May 30, 2024, ICANN org eliminated 33 staff positions, out of 485 total positions, across all functional areas and regions. This was an incredibly difficult decision, as our talented, dedicated, and loyal employees are essential to serving ICANN's mission and its support for the community. We recognize the valuable contributions of the affected employees and have ensured they received the respect, dignity, and compassion they deserved, including providing outplacement support to assist with their transition and future job search.
This decision is part of a broader effort to evaluate costs and activities, focusing on resource management, ensuring operational efficiency, and achieving financial sustainability. Other key areas of focus include reviewing travel and meeting costs, optimizing the use of regional offices, exploring opportunities for greater cross-collaboration and process improvements across functions and regions, and evaluating ICANN's fee structure to ensure it scales realistically with inflation.
Through these challenging decisions and the ongoing changes in our global environment, we will secure ICANN's financial stability and sustainability. We must continue to work together in consistently assessing and adjusting to inevitable changes, ensuring ICANN's ability to fulfill our mission with the same quality, high standards, and volume of work our community expects.
Thank you for your support. We look forward to continuing the dialogue over the coming weeks and months.
