Canterbury University has emailed its 3000 staff to call for voluntary redundancies, following a 13 percent drop in student numbers after the Christchurch earthquakes.
Its international roll has shrunk 30 percent, while first-year enrolments have dropped by 25 percent.
Tertiary education minister Steven Joyce last month guaranteed Canterbury, Lincoln University and CPIT would be funded for the number of students they had prior to the September 2010 earthquake.
But in a letter emailed to staff yesterday, Canterbury's Vice-Chancellor Rod Carr said the institution was facing significant financial challenges.
It was likely to be years before the its annual revenue covered its operating costs, he said.
Last month the Tertiary Education Union said Canterbury University was planning to cut more than 350 jobs over the next three years, quoting an internal document showing staff numbers would be cut by 18 percent.