Staff are due to be made redundant at Lancaster and Morecambe College.
Wes Johnson, principal and chief executive at the college, which employs around 420 members of staff and has more than 4,000 students, said it was in the “unavoidable position” of having to reduce staff costs.
Government funding to colleges has been cut by 30 per cent between 2009 and 2019.
Colleges also receive less funding per pupil than schools and universities.
Mr Johnson said the college has a strong balance sheet with no debt, despite £14m of investment into the campus in recent years.
However, he said that “deficit annual budgets over recent years limit the amount that the college can reinvest into its staff and resources.
“The college finds itself in the unavoidable position of having to reduce its staff costs which will incur some redundancies whilst prioritising the continued improvement of the student experience and in meeting local skills needs, a situation replicated in colleges across the country,” he said.
“The college intends to maintain and enhance its curriculum offer in line with local employment needs, for example, bringing together Music and Creative Media to form a new Digital Music Production pathway.
“Students on the first year of any two-year course will continue with their studies as planned.
“Two new major study programme pathways will be announced in the coming weeks, driven by local employment opportunities.
“Over the past two years, Lancaster & Morecambe College has seen significant change to ensure it meets local employment skills requirements whilst remaining firmly rooted in the community that it serves, offering opportunities for all.”
Across the country the number of 16 - 18 year olds has also fallen in recent years.
“In the Lancaster district this fall was predicted to be 9.5 per cent between 2014-2020, further impacting the funding that colleges and school sixth forms receive.
Mr Johnson added: “Local employers now shape our broad curriculum at the college to ensure that our graduating students have the knowledge, skills and behaviours that are in demand in our region.
“The college also prides itself in not only offering high quality technical education to highly driven young people and adults, but also in ensuring multiple entry points back into education for all members of our community, contributing to social mobility and community cohesion.
“It is always deeply regrettable to have to reduce staffing costs but the college must respond to the current funding challenges that the sector faces in order to meet the needs of its community long into the future, building on the organisation’s proud history of delivering technical education since 1824.”
He said that until the core funding rate is increased, the challenging financial climate will not change.