The Department for Business Innovation and Skills (BIS) could lose 25% of roles in some areas, according to sources.
The Guardian has reported that 3,000 staff employed by BIS will be told next week that a voluntary redundancy scheme will be launched to help achieve the £38m of savings in administration ordered by the chancellor George Osborne.
Up to one in four staff in some BIS operations could be at risk, according to sources.
BIS had been rumoured to be one of the departments that would be hardest hit by the cuts after the chancellor pledged to protect spending in the health service, overseas aid, and to a certain extent in schools.
But officials have insisted rumours of 25% headcount reduction across the department were wide of the mark.
A BIS spokeswoman confirmed some cuts were coming. She said: “We intend to launch a voluntary scheme next week as part of our in-year cost reductions.”
The cuts could start just days after leaked Treasury documents revealed up to 1.3 million jobs could be lost across the public and private sectors as a result of the Budget.