The Global Fund's General Manager Gabriel Jaramillo said in a statement that the fund had completed a re-organization that would rebalance its workforce with 39 percent more people managing grants and 38 percent fewer in support roles.

Jaramillo took over on February 1 after an investigation found a "grave misuse of funds" in four countries that received grants from the Fund, a unique public-private financial institution that spends donor money on tackling three of the world's biggest killer diseases.

The revelation prompted governments such as Sweden and Germany to freeze their contributions, and a lack of donor funds later forced the Global Fund to scrap new grants until 2014.

Jaramillo's promise to bring efficiency, accountability and results got a swift vote of confidence from the Bill & Melinda Gates Foundation, which pledged $750 million in January, more than the $650 million that the Microsoft chairman's charity has contributed since the fund's launch 10 years ago.

But more is needed from governments, which have provided the bulk of the $22.6 billion that has been raised by the Geneva-based organization to date for its work in 150 countries, paying for 3.5 million anti-retroviral drug treatments and 9 million tuberculosis treatments.

The fund plans to disburse about $3 billion this year and next, and more resources will now be focused on 20 "high impact countries" that bear most of the burden of the three diseases, including Nigeria, China, India, Indonesia and the Democratic Republic of Congo.

A source close to the fund said the reorganization would involve about 120-130 redundancies, largely in strategy and research jobs, but more posts would also be added, so the Fund would shrink from about 650 to about 600 staff overall.

(Reporting by Tom Miles)

(The story is refiled to correct the date of Jaramillo's appointment from January to Feb 1 and it corrects to say the Fund found grant money being misused rather than it misused donor money and it clarifies connection between frozen contributions and new grants being scrapped.)

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