Staff at a specialist unit, which provides training and support to young people, will find out next month whether they have lost their jobs.
Around £470,000 worth of contracts to Tressell Training come to an end this month which will leave the service cash-strapped unless council bosses can successfully find alternative funding.
The issue was discussed at Wednesday's council meeting.
At last month's cabinet meeting Simon Hubbard, corporate director for regeneration and planning, said: "Rapid and fundamental shifts in the funding environment for training and skills development have resulted in reduced opportunities for securing contracts to deliver some skills development and vocational training through Tressell Training.
"Changes in management and staffing structures are necessary in order to align this service area more closely to contractual requirements."
Cllr Peter Armstrong said it would be 'barmy' if Hastings closed Tressell Training.
He said: "We are the only town just about in the South East that has this sort of service."
Cllr Armstrong suggested the council use money from its reserves to maintain Tressell Training.
Cllr Matthew Lock said: "Negotiations are continuing with potential new contractors and recent discussions with the college about integrating Tressell Training there have been positive.
"The potential redundancy date has now been moved to August 31 and it is hoped by the beginning of August that sufficient information will have been provided by potential funders so we can minimise the number of redundancies.
"The staff who are being affected have been absolutely superb over the way they have approached this.
"It shows the commitment they have to the children."
Tressell Training has been providing training and support for young people from Hastings and the surrounding areas since the early 1990s.
It runs tailored programmes for 14 to 19-year-olds who are either
having problems at school and may not complete their statutory education or who need additional support to get into employment, education or training.
It also provides one-to-one support for people of all ages who face additional barriers to joining the workforce.
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