One of the country's biggest and most successful colleges is to axe a tenth of its workforce.
Newcastle College plans to cut more than 170 jobs, including 120 teaching positions. It blamed the move on cuts in the FE sector, after the Government announced in October that it would be reducing funding by pound;1.1 billion - a quarter of the skills budget - over the next four years.
The proposed cuts, including 124 lecturer, instructor and assessor posts, would decimate its staffing, which currently stand at 1,724.
The University and College Union (UCU) has accused college managers of using funding cuts as an excuse for redundancies, and warned the decision would have a "devastating" impact on the local economy.
UCU regional official Iain Owens said: "Workers in the North East are losing their jobs daily. Now Newcastle College has decided to make redundant the very people whose job it is to retrain the unemployed.
"What we do not, and will not, accept is the college jumping the gun and using funding cuts to unnecessarily sack staff or hold a gun to the heads of staff who fear for their livelihoods."
Colleges received their indicative funding allocations from the Skills Funding Agency in December.
Dame Jackie Fisher, chief executive of Newcastle College Group (NCG), said: "We are doing everything we can to safeguard courses and jobs. However, as a result of the change in funding allocation, we have had to announce the likelihood that 171 posts will be made redundant."
In the Department for Education's latest performance tables, Newcastle College had the highest FE national average point score per student in the country.
Dame Jackie said the success was "testament to our outstanding leadership, investment in resources and excellent teaching and learning".
During 2009-10, more than 18,000 FE students, 7,000 work-based learners and over 3,000 higher education students were enrolled at Newcastle College, which reported a turnover in excess of pound;80 million.
Last month, governors at neighbouring Northumberland College agreed to join NCG, which also includes Skelmersdale and Ormskirk College in Lancashire and Sheffield-based national training organisation Intraining. The merger has to be ratified by the Government, and could take up to a year to complete.
Newcastle College is one of 27 members of the 157 Group, made up of "large, highly successful and regionally influential" FE colleges.
A Department for Business, Innovation and Skills spokeswoman said: "FE colleges are independent organisations and, as such, they are responsible for their own terms and conditions, pay and workforce modelling. As part of the spending review, tough decisions about departmental budgets have been taken and, like all other areas, FE has made its contribution."