More than 100 staff face the axe after Sheffield Council decided to close all its nurseries.
The authority currently provides childcare at seven Sure Start children’s centres but has decided to leave provision to the private and voluntary sectors.
Facilities are being withdrawn at Chancet Wood, Firth Park, Primrose, Broomhall, Burngreave, Bankwood and Valley Park.
Sheffield Council is making £6.8 million of cuts to children’s services this financial year.
Around half of the cuts stem from the Government no longer giving money to councils to provide nurseries.
Instead, the Department for Education is funding nurseries directly, with payments based on enrolment.
One member of staff said: “It’s devastating news because 102 people work at the seven centres in the nurseries.
“Although we’ve been told there will be some redeployment opportunities, the council is shedding jobs left right and centre and it’s difficult to see where the alternative posts will be.”
Sheffield Council said no Sure Start centres themselves will close.
Mick Daniels, of Brushes Tenants’ and Residents’ Association, Firth Park, said: “I’m very disappointed at this news because there is a shortage of nursery places in this area. Where are the children going to go?”
Sheffield Council’s decision follows the announcement by charity Action for Children that The Meadows nursery, Shirecliffe, will close in September.
Other private nursery providers are worried about the changes to funding arrangements.
Rod Padley, trade union convenor for Unison at Sheffield Council, said: “We are in talks with the council about the job losses. It is hoped that most will be voluntary.”
Coun Jackie Drayton, Sheffield Council cabinet member for children’s services, said: “This situation is due to changes forced by Government cuts.”