In total some 200 jobs are set to go.

According to the Sheffield Star the company broke the news to staff through its internal computer system and emailed employees warning them not to speak to journalists.

Kevin Osborne, regional officer for Unison, which represents many staff and is being consulted by management, said: "The announcement came as a complete shock. Our members are obviously very worried about the threat of redundancies.

The company revealed it has a £900 million budget shortfall over the next 30 years.

According to the Star, Sheffield Homes' internal message circulated to staff read: "Over the next week we will be meeting with groups of staff throughout Sheffield Homes to talk to you directly about the financial pressures facing the company.

"We want to see you all in person so we can't do this all at once. In the meantime we are putting this message on the intranet to bring you up to date.

"It is with great regret that we have to announce that we have started consultation with the trade unions on the impact of financial pressures for Sheffield Homes next year which could lead to a potential redundancy situation."

The company said factors behind the redundancies include a £6m reduction in Government subsidy over the next five years, the end of the Decent Homes programme, need to deliver new services, credit crunch and recession.