Hundreds of non-medical staff at Yeovil Hospital are to be transferred to a private company, it has been confirmed.
Hospital bosses wrote to unions confirming that 360 support staff would be employed by a new firm, Simply Serve, from 1 February.
The subsidiary company, set up in July, is wholly owned by the hospital.
Hospital bosses said the move would protect jobs and safeguard services but Unison, the union, said the move would have a "detrimental" effect on care.
The decision, which affects roles such as cleaners and porters, was taken at a meeting of hospital bosses on Wednesday.
The hospital previously said the decision would not be made public before 27 December to allow time to inform staff.
'Breaks up team'
In a letter to unions, hospital human resources director Mark Appleby said the new company would "mirror" NHS terms and conditions, including pay settlements, for a minimum of five years.
Also, Simply Serve staff who subsequently secure employment with Yeovil Hospital, would have their employment recognised as continuous service.
A petition urging the hospital to defer the decision was signed by more than 900 people. Unison said a staff petition also gathered 772 signatures.
Helen Eccles from Unison said the hospital had refused to consult with unions and they had been unable to speak during Wednesday's meeting.
She said: "It breaks up the NHS team and puts staff outside the nationally-agreed terms and conditions and we believe it could have a detrimental effect on patient care."
The hospital said a month-long staff consultation received "just two pieces of staff feedback".
A spokesman said moving staff to the new company would allow it to save money as well as set new terms to "attract better skills".
The company would also, in time, be able to serve clients other than the hospital.
A Care Quality Commission inspection in July 2016 rated Yeovil Hospital as "requiring improvement".
According to the hospital's operational plan, it is running at a deficit of £13.1m in the current financial year.