Eric Prescott, the chief executive of Leonard Cheshire Disability, has resigned with immediate effect after 18 months in charge.
Prescott was appointed in 2008 and asked to review the charity's finances because it was running at a significant loss. He brought in a major restructuring programme, but the charity refused to confirm or deny a claim by a former employee that this involved making the directors of fundraising, development, operations, human resources and communications and campaigning redundant.
According to sources, there was continuing disagreement with some senior staff over the implementation of cost-cutting measures. Prescott resigned on 14 May this year.
The former employee, who asked not to be named, said: "Morale at the charity is at an all-time low. Staff and trustees knew the charity needed to make major changes to its service provision because of the personalisation agenda, but the massive cost-reduction exercise has gone too far. About 350 people were told their posts were at risk of redundancy."
Another source close to the charity said Leonard Cheshire would have been in a dire financial state if the cuts had not been made.
"Prescott was brought in to do a difficult job," the source said. "The charity needed the medicine, but didn't like it. The cuts met considerable resistance from staff and were unpopular among some people at board level. There was a lot of sniping and vocal lobbying among staff."
A spokesman for Leonard Cheshire Disability said it could not reveal if there had been a pay-off agreement with Prescott, or whether he had a job to go to. Asked if Prescott's sudden departure was unexpected, he said it was expected "in some quarters".
In a statement, Prescott said: "The last couple of years have been very challenging for many organisations in the third sector, including Leonard Cheshire Disability. I am confident that the decisions we have made are the right ones to set the organisation on the road to future success."