UP to 24 lecturers at Blackpool and The Fylde College have been told they must re-apply for their own jobs.
It comes as part of a major shake-up of the renowned School of Art and Design which could see posts axed amid a "recruitment crisis" for some courses.
But many members of staff are so angry at the way the cuts could damage the department's reputation they may refuse to re-apply putting the future of the courses in jeopardy.
One member of staff told The Gazette: "The restructuring could see staff being made redundant or having to take lower positions.
"Worst case scenarios could be students with one or two years left of a degree course, coming back to college in September with no trained staff and no course.
"People have been told to keep this quiet, but that is wrong."
A document leaked to The Gazette says "all roles will be affected by the restructure with the exception of the head of school" and "all posts are available for application from staff."
It adds: "It has been identified there is a need for re-alignment to a more appropriate staffing structure in order to adapt to changing demands and deliver cost effectiveness."
The college says it expects the loss of no more than two full-time posts, but the union fears it could be up to six.
Colin Gledhill, North West regional official for the University Colleges Union, said: "They are dismissing all 24 lecturers and making them re-apply for their jobs.
"Our members are very unhappy about this situation because they're concerned about how the future reputation of their department will be affected.
"In a very unusual move, a lot of them are saying they are not going to bother re-applying for a job under the new structure because they don't want to be connected with something that doesn't meet their high standards.
"We've asked for the consultation period to be extended and for more information before we decide what action to take."
Managers at the college launched a consultation with staff and unions after a drop in student numbers on the five degree courses prompted a review.
This is despite high-profile marketing. College bosses recently drafted in former student and top actor John Simm to star in a TV advertising campaign.
Between September 2004 and September 2006, the number of students on the five three-year degree courses has dropped by 70 from 380 to 310.
The degrees effected are Graphic Design, Photography, Scientific and Natural History Illustration, Information Illustration and Wildlife Photography.
Blackpool and Fylde College principal and chief executive Pauline Waterhouse said the quality of the courses offered would remain a priority in the proposed restructuring of the department.
She said: "This restructure is intended to better recognise the discrete specialisms within the school and preserve a staff student ratio that is much higher than many universities and art colleges in the sector.
"We've seen substantial growth in our degree-level recruitment at Blackpool and The Fylde College and this school is a vital component in our new 10m university-level campus in central Blackpool.
"Graphic Design and Photography remain two of the college's most popular courses and continue to recruit very healthy numbers.
"Other more niche courses have experienced a decline in recruitment and this restructure will help those course teams adapt their curriculum to meet the changing demands of the market and industry.
"The School of Art and Design remains one of the college's flagship higher education departments and all existing and potential students can be assured that they will continue to receive the very high quality of teaching that this school offers.
"There are no financial objectives behind this restructure and the overall budget will remain largely unchanged. Overall we anticipate no more than two full-time posts may be affected."
Stephen Mullen, president of the National Union of Students at the college, said: "If the proposed cuts do happen our main concern would be that the quality of teaching is maintained."
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