A University of Newcastle proposal to cut positions from its business school will leave it with "significantly weakened teaching, research and administrative capability", according to the union fighting the plan.
The National Tertiary Education Union's Newcastle branch has started a petition in response to the proposal, which could affect 12 academic positions.
It is understood seven roles could be cut. A source said "morale is through the basement".
UON Pro Vice-Chancellor, Faculty of Business and Law, Professor Tony Travaglione, said proposed changes to the staffing structure would "scale back some discipline areas where demand is forecast to fall, to allow for potential scale up in areas where demand is growing".
"It's our absolute responsibility to continually review our program offerings to ensure we are adequately resourcing areas of greatest demand."
He said the consultation process would look at a range of options before the final structure is proposed and the end number impacted was "expected to be much lower".
The source said staff were told a projected drop off in online enrolments would produce a shortfall of more than $3 million, of which half could be recouped by cutting positions.
"But there's a bunch of other ways you could tackle the problem," the source said.
"You could go into deficit, borrow money, pay it off later, wait till enrolments pick up again, or divert less to the Vice-Chancellor's Office."
Professor Travaglione said available support included the employee assistance program, chaplaincy services and human resources specialists.
Staff affected by organisational change can opt for a "voluntary separation package" or seek redeployment.
NTEU Newcastle branch president Emma Joel said the union had lodged an industrial dispute, but remained "hopeful" of finding alternatives.
"We weren't expecting this change to be launched.
"What we're seeing across the board is staff are being asked to do more with less.
"We're concerned there will be impact on workload, which will impact on student experience."
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