"Large-scale" job losses are expected at the University of Southampton among management, specialist and administrative (MSA) staff. A union source said managers had indicated that the institution was overstaffed by around 350 MSA staff.
The concerns were raised after vice-chancellor Bill Wakeham announced a review of income and expenditure. In a letter to staff, Professor Wakeham said staff costs had risen by 9.5 per cent in 2006-07, outstripping income growth, and that a growing deficit was "inevitable".
He said the "In Ex Review" will aim to reduce administrative costs while improving research performance and international income. Staff costs are to be reduced from 60 per cent of total expenditure to 56 per cent by 2010-11. There will be a recruitment freeze on academic staff above the level of lecturers, unless there are exceptional circumstances.
A university website said: "The intention is to run our future (management, specialist and administrative) processes with fewer staff ... redundancies may have to be contemplated."
In a joint statement, unions at the university, which have dubbed the exercise the "Inexcusable Review", said: "In September 2003, Bill Wakeham announced the completion of his vision of restructuring. Now, just five years on, we are told it's all wrong, cuts have to be made and jobs will have to go."
The unions fear that "large numbers of compulsory redundancies" will be announced in July.
One academic told Times Higher Education that the university had gained 250 administrative staff since the restructuring, while the rise in grant income was smaller than that at similar institutions. "Both of these are directly related to the restructuring and the time it has taken staff here - both academics and support staff," the academic said.
A spokeswoman for the university said: "I do not know where the unions have got the figure for 350 employees from. Staff costs have risen more sharply than expected as a result of the national pay agreement and the early adoption by Southampton of the pay framework in 2004, not the restructuring of the university in 2003."
She said the university took action last year to restrict the growth of staff numbers, adding that with an average 10 per cent annual turnover of management, specialist and administrative staff, "we expect there to be considerable opportunity for reductions in posts to be achieved through staff deployment".
"We are still at a very early stage of the review and are consulting widely with our staff. "