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Business manager Lindsay Smith said yesterday the clinic had lost ACC referrals for sexual abuse sufferers, a Ministry of Health eating disorder contract, and had fewer DHB referrals and self-referrals.
The hospital was staffed for 45 to 50 patients, but needed to provide for 30 to 35.
Two inpatient wards - Gwen Wilson and Frank Hay - would combine as a single ward.
Alexander House, a residential building catering for nine self-sufficient inpatients, would be mothballed, with its inhabitants moving to the former Frank Hay ward.
Closing the building would save about $100,000 annually on power bills.
The clinic was choosing to mothball the hostel, rather than the extra ward, because it was more expensive to heat.
Mr Smith's own position would halve, in a voluntary move, which would allow him to stand in October's elections as a city councillor, he said.
Kitchen staff would reduce by one full-time equivalent (FTE), nurses 5.5 FTE, psychiatric staff 0.7 FTE, psychotherapy 1 FTE and office staff 1 FTE.
All up, 9.7 FTE would go, although it was not possible to say yet how many actual staff members that entailed.
Details would be worked through in the next two to three weeks.
It was important the clinic acted before the situation worsened.
Ashburn did not have a shortfall for the 2009-10 financial year.
During the past five years, ACC funding for sexual-abuse inpatients dropped from $2 million to $900,000 in the 2009-10 financial year.
Referrals for the service were now non-existent.
ACC stopped using the contract between six and nine months ago.
The clinic lost a $500,000 five-bed eating-disorder contract with the Ministry of Health, effective from the end of this month.
DHB referrals had dropped too, and private paying patients were opting for shorter stays.
The clinic raised its fees last December, had become more proactive in gaining new contracts and introducing new programmes, and had cut costs.
Deputy medical director Dr Stephanie du Fresne said losing staff - Ashburn's "treasure" - had been distressing as the clinic enjoyed a stable workforce with extremely low staff turnover.
Dr du Fresne said staff and patients had worked together to find creative ways to save money, reflecting Ashburn's philosophy as a "therapeutic community" empowering patients.
ACC claims management general manager Denise Cosgrove, responding by email, said the contract with Ashburn for intensive residential rehabilitation remained, but long-term treatment was not always the most appropriate for sexual abuse sufferers.
Funding to Ashburn had been dropping since 2002-03, when it was about $2 million a year, she said.