Severn Valley Railway says it has let 12 members of staff go due to the economic downturn and a reduction in visitor numbers.
It said it had made five compulsory redundancies and seven people had not had their contracts renewed this winter as they had reached retirement age.
The firm runs a steam train from Bewdley in Worcestershire to Bridgnorth in Shropshire and employs 150 staff.
It said visitor numbers fell by about 10% in 2010 to 250,000 passengers.
Visitor service manager David Mee said he expected to welcome about 205,000 visitors in 2011.
He said the posts that had been lost were in administration, cleaning and in the shop.
He said he did not expect to make any further redundancies and staffing levels would not affect the 1,500 people who volunteered for the railway.
The tourist attraction reopens for the summer season on Saturday.