Combat Stress made 41 redundancies as it grappled with a drop in income of more than a third in the last financial year.
Income at the veterans mental health charity fell from £16.4m in 2019 to £10.2m in the year to the end of March, its latest accounts show.
The charity warned in January that job cuts appeared likely as it tackled the projected fall in income, mainly down to a reduction in government funding.
The accounts show voluntary income fell by £5.5m, and legacy income was also down more than £2m on the previous year.
Total expenditure fell slightly to £14.6m, with 82 per cent of that figure being spent on charitable activities.
Combat Stress said it launched a service review last year to help tackle income pressures that involved all trustees, executive directors, senior managers, many other employees and veterans themselves.
The cost of the review project, which included the employment of external consultants to manage the process, was £270,000. This included redundancy payments for 41 employees.
The charity increased its spending on fundraising to address the challenge of raising an higher percentage of income from voluntary donations.
Jeff Harrison, director of resources at Combat Stress, said the review was launched after it became clear in the summer of 2019 that the income pressures facing many charities would affect Combat Stress.
“This meant we would have to reduce our costs to bring them in line with the expected income levels over the coming years.
“We believed that a drastic reduction in expenditure in 2019/20, while conducting the service review, would affect those veterans we help, so we used our reserves to fund our work before bringing finances back into balance in 2020/21.
“Earlier this year, having experienced a significant drop in income, we were forced to scale back our services and workforce to operate within our means.”
Harrison said the charity was already seeing the benefit of its actions because costs had fallen in line with income.