Presbyterian Support Otago chief executive Gillian Bremner said the counselling service, known as the Cameron Centre, duplicated services available from other agencies.
Part of the organisation's Family Works service at its Moray Pl headquarters, it was established in the 1960s and became part of the family and community service several years ago, Mrs Bremner said.
Because of increased demand for social work, the organisation proposed to reduce full-time equivalent counselling staff from 3.5 to one.
The remaining counsellor would focus on youth needs.
Redundancies were likely because, despite Family Works retaining 20.3 full-time equivalent staff, the skills required for the new roles were different.
Mrs Bremner said counselling was available from other social and government agencies, including primary health organisations.
Criteria for government funds used to run Presbyterian Support's services had changed and were targeted towards community-based services.
"If we carry on doing what we are doing, we would struggle to be eligible for that [government] funding."
The recession had also had an impact, in terms of community trust grants.
Mrs Bremner said increased demand for family social services, partly a result of the recession, was the impetus for the change.
It was also in line with Presbyterian Support's long-term strategy. The organisation wanted to increase social work services across the Otago region.
The shape of the new service was yet to be determined, and Presbyterian Support had asked staff for feedback after presenting differing proposals.
It hoped to implement the changes in the new year.
Former staff member Nadia Madill, a psychotherapist for the service for more than 14 years, said she was upset by the proposal.
Since the 1960s, the Cameron Centre had been part of Dunedin's support and therapy network, commonly had a long waiting list, and had grown in response to community needs.
Mrs Madill said that, as a Presbyterian, she supported the organisation and did not want to criticise.
However, she believed the proposal constituted a change in philosophy not signalled to church members.
