Some 30 workers face redundancy this month and the 30 autonomous community associations, mostly based in secondary schools, could face cash problems.
The council plans to stop funding staff in adult education and youth and community services and devolve budgets to the associations. A report was considered by the community services committee last week at a stormy public meeting.
Tim Howard, Walsall's new corporate board director for education and cultural services, said that in the confusion no one was really sure which vote was carried. He added that the redundancy notices still stand but expects that a significant number of staff will be re-employed by the community associations next month and they would continue to be funded by the council providing service level agreements were signed.
He said the council wanted to ensure that the associations were properly autonomous and protect them against loss by giving them incorporated status.
But community workers said morale was "disastrous", with the prospect of "precarious contracts". Paul MacManomy, a local officer for Unison, the public-services union, said the plan was "no different to any other privatisation".
He said incorporation was impractical before the handover of funds as the process took at least 15 weeks. Service agreements, pensions and contracts with schools on use of premises had yet to be finalised, he added.