GENEVA — The World Health Organization will cut $1 billion from its next budget because of financial problems among rich donor nations and the exchange rate for the weak U.S. dollar, the agency's director said Tuesday.

The Geneva-based UN health agency supports health ministries around the world, helped eliminate smallpox in the late 1970s and has coordinated worldwide efforts to deal with the swine flu pandemic and other emergencies.

Margaret Chan, WHO's director general, told reporters that a drop in voluntary contributions among its top 30 "traditional" donor nations is just part of the agency's problem. The other part, she said, is that the dollar has fallen to a record low against the Swiss franc, which is now worth about $1.13.

"Because of their own financial difficulties, some of them have cut back," she said of the wealthiest nations, many still struggling in the wake of a global financial crisis. "We are hit as well by the currency exchange rate. We get our income in U.S. dollars, and we are paying our staff in Swiss francs."

The Geneva-based agency previously said it expects a US$300 million (euro212 million) deficit this year.

Budget documents show that WHO's $4.5 billion biennial budget in 2010 and 2011 dropped by more than $1 billion for 2012 and 2013, because of fewer voluntary contributions from nations, non-governmental organizations and other donors.

As a result, WHO is expected to lay off 300 workers -- about 12 per cent of its local staff. WHO's emergencies unit alone will be cutting about half of its 80 staff.

At a news conference alongside multibillionaire Bill Gates, a major donor to global health causes, Chan said many nations are still supportive despite the cutbacks. The pair met with reporters as the world's health ministers gathered for WHO's general assembly this week.