Staff at Swansea University are calling on managers to rethink a programme of cuts after the institution was awarded a 10 per cent increase in its research and teaching funding.
In 2007, the Higher Education Funding Council for Wales assessed the university's financial health and rated it "Category C", meaning that it was likely to face "significant financial difficulty within two to four years".
In 2008, Swansea announced plans to lose about 60 academic posts through voluntary redundancy and early retirement, in a bid to gain a 3 per cent surplus by 2009-10 and earn a "Category A" assessment.
But HEFCW's annual funding allocations, announced last month, saw the university's research income rise by £3.6 million, or 36 per cent, to £13.5 million. Its total funding rose by 10.3 per cent to £42 million.
Andrew Morgan, University and College Union chair at Swansea, said: "Our concern is that the university put its plan in place before the funding ... was known.
"It needs to reconsider its approach in light of our outstanding performance."
Swansea has also suggested that academics who were not submitted to the 2008 research assessment exercise be redesignated as "tutors" so that they are not returnable in the next assessment.
"Our view is that inclusion in the RAE was a tactical exercise and was not related to the quality of ... the staff concerned," Mr Morgan said. "We do not want to see people being put under pressure because they were not returned."
Swansea invested heavily in academic recruitment before the 2008 RAE. It appointed 112 scholars between 2005 and 2007, including 28 professors. During this time it failed to generate the 3 per cent surplus recommended by HEFCW.
In 2008, management at Swansea announced that a "significant staffing reduction" was needed to compensate for higher employment costs caused by the recruitment drive. About 60 fixed-term staff funded by European Union grants that ran out last year have already left the university.
A spokeswoman for Swansea said the university had received the largest increase in research funding of any traditional university in Wales, with only ten English universities getting a bigger hike.
"(Swansea) continues ... active dialogue with staff and trade unions to build upon this strong performance in the RAE and to achieve financial sustainability," she said.
"(It) is currently in the process of budget forecasting, with the aim of improving its financial position from its 2007-08 surplus of £1.8 million (1.3 per cent of income) to 3 per cent in 2009-10."
Earlier this year, Richard Davies, vice-chancellor of Swansea University, suggested that it should merge with Swansea Metropolitan University.
The suggestion was strongly opposed by David Warner, vice-chancellor of Swansea Metropolitan University. Swansea Met, which saw its research funding rise by 231 per cent in the RAE, has produced an average surplus of 9.85 per cent in the past five years.