Up to 80 posts are to go at a charity that provides education for people with learning difficulties.
The Lincolnshire-based Linkage Community Trust said cuts in funding meant it had to make savings of £1.3m in the next year.
Changes in use - with more day learners and fewer residential students - also meant a reduction in staff numbers.
A 30 day consultation period is being held. Managers said they would re-deploy staff where possible.
Director of Education Matthew Orford said: "It's the ongoing problem of public funding, which is affecting all local authorities and anybody who receives public funding.
"With the cuts, with the move to localisation, it just means that local authorities are no longer in a position where they can commit to residential learners."
The charity provides residential accommodation at campuses at Toynton All Saints near Spilsby and at the Weelsby Campus near Grimsby.
It also offers day services and employment services, which operate throughout the East Lindsey district, Lincoln and Grimsby.
It currently employs about 800 people.