Up to 170 jobs are at risk at the debt advice charity StepChange because of reduced demand for its services.
The charity has slightly more than 1,500 staff, according to its latest accounts, in offices around the UK.
Unite the union said in a statement that the StepChange offices in Leeds and Newcastle upon Tyne would be the hardest hit, while pay levels for its remaining employees will be frozen.
The union said the charity’s management had declined to consult its members to try to avoid the redundancies and had instead announced the decision to make about 10 per cent of the workforce redundant within weeks.
The redundancies had been planned to go ahead before the end of furlough and only months before a massive and imminent upsurge in demand for free debt advice, according to the union.
Unite also said the StepChange management believed this demand could be met by an online debt advice tool, reducing the need for human advisers.
One debt adviser told the union: “Many of our clients are not able to access online help and rely on a friendly and knowledgeable advisor at the end of the phone.
“Some of them are very vulnerable. Our clients want a supportive, caring person to talk to, not a machine.”
Union members are asking the charity’s management to “keep debt advice human”, to look at other ways to cover the shortfall in funding as a result of the pandemic, and to address the charity’s “flawed finances”.
Another debt adviser said: “Senior management have publicly admitted the charity’s funding model, which relies chiefly on 'fair share' contributions from creditors, is unsustainable.
“The charity should urgently explore alternative ways of funding its activities, to safeguard our vital service for the future.”
Phil Andrew, chief executive of StepChange, said the proposals were regrettable, but were based on a reduction in the number of people coming to the charity for debt advice, which has been significantly reduced since the start of the pandemic.
“In 2020 we helped 200,000 people through full debt advice, compared with more than 300,000 in 2019.
“This year is on track to see continuing reduced demand for debt advice. The inescapable reality is that our funding structure depends upon advice volume, which is why we are sadly having to introduce cost-cutting measures that include, but are not limited to, redundancies.
"This is a difficult and painful decision. It is not what we would have wished to do, but we believe it is the right thing to protect the long-term future of the charity,” added Andrew.
"We hope that this will help to concentrate the minds of policymakers and funders alike on what debt advice is for and how it can be sustainably funded.”
Andrew said the proposals were still under consultation with colleagues, which will include an internal engagement process with everyone potentially affected.