Six day care centres for elderly people are to close in the Grantham area.
Community Care for the Elderly said it was unable to continue services beyond 31 March due to uncertainty around the future of county council contracts.
The charity's day care centres are in Barrowby, Long Bennington, Great Ponton, Ancaster, with two in Grantham.
A number of transport services will also be terminated and all six of the charity's permanent staff will lose their jobs.
Peter Duxbury, the director of adult social care at the county council, said funding had not been cut.
He said: "We understand the concerns of people who attend the day centres and the services. We are seeking to make sure that every person who will be affected by this change in the contract will have alternative provision put in place."
The charity has been providing care services in South Kesteven since 1983.
Some 60 clients use the day care centres in Grantham and surrounding villages.
Ray Biggs, whose mother attends one of the Grantham day care centres, said: "For a lot of them, they don't understand and realise what is going to happen and (the news) was delivered to them earlier this week.
"A lot of them were extremely shocked and confused and upset that they're going to lose the service. I think what we need to do is to try to put ourselves perhaps in their shoes and try to get some idea of what they're feeling."