Children's charity the Rainbow Trust Children's Charity is closing its two respite houses, putting 16 jobs at risk.
The trust said there was not enough demand for places at the houses in Hexham, Northumberland and Great Bookham, Surrey, which provide care for seriously ill children and their families.
A spokeswoman for the Rainbow Trust said she was unable to confirm how many of the staff would be made redundant when the houses closed at the end of the year.
"There will be redeployment opportunities for respite workers to become family support workers, very much doing the same thing but at home," she said. She said it had not yet been decided how many redeployment jobs would be available.
"This is not about saving costs but using funds as effectively as possible and meeting the recognised needs of families in their homes," she added.
The houses will be sold and profits will be used to increase the number of family support workers employed by the trust.
The Great Bookham house opened in 1990 and the Hexham property in 1996. Only 36 families in total had used the houses without also receiving home visits, the spokeswoman said.
Each house cost £300,000 a year to run.