Up to 115 academics are set to lose their job as Victoria University pins its dwindling fortunes on a new college for first year students.
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A leaked document, obtained by Fairfax Media, reveals that the financial viability of the western suburbs university is "at risk".
The university has been in the red for four of the past five years and is predicting another deficit this year.
The document, which was approved by vice-chancellor Peter Dawkins and circulated to staff on Friday, said the university had above average staffing costs and was more reliant on student revenue than other Australian universities.
"These factors, among others, have placed the financial viability of VU [Victoria University] at risk," it said.
The National Tertiary Education Union has hit out at the plan, which they have described as a "knee-jerk reaction".
In an Australian-first, the university will create a standalone college for first year students to improve their university experience and reverse poor retention rates.
Around 60 per cent of students at the university have received ATARs below 50 or are less prepared for higher education, according to the confidential document. It said this was due to the introduction of the demand-driven system.
This has led to one in three students dropping out during the first year of study - a much higher rate than the nationwide average of 21 per cent.
Students have also reported higher rates of dissatisfaction with the quality of teaching provided at the university, and only 68 per cent said they were satisfied with the support they were receiving, compared to an industry-wide median of 74 per cent.
The college will deliver first year bachelor degrees and university preparation courses. "It will also provide co-curricular, extra-curricular and personal support and guidance to our first year students," the document said.
Staff will be able to apply for about 50 academic teaching roles at the new college as well as voluntary redundancies, before the university resorts to forced redundancies.
The university's union president and academic Dr Paul Adams said the changes would impact the quality of education provided to students.
He said academic staff working at the new college would have to teach intensively, limiting their ability to conduct research.
"We are outraged," he said.
"VU has been a leader of research in the west and a lot of that will disappear."
Angry staff will protest at the university on Tuesday morning.
Deputy Vice-Chancellor Kerri-Lee Krause said the new college would meet the university's commitment to give students from all backgrounds an opportunity to undertake a degree.
"Research has shown that support tailored to the needs of students increases rates of student retention, engagement, success and quality of learning," she said.
She said the college would provide support to students on a scale that had never been seen before in Australia.
She said it was not yet known if forced redundancies would be required.
