Heriot-Watt University this week confirmed it was considering cutting up to ten jobs - a quarter of its workforce - at its School of Textiles in Galashiels.
The University and College Union (UCU) has condemned the proposals.
It fears staff will be sacked so that researchers can be recruited from other textile schools, in a short-term bid to boost research ratings.
However, university chiefs, who are currently constructing a new £12million halls of residence on their Borders campus at Netherdale, the first phase of which is due to be completed this summer, insist they remained committed to Galashiels.
Mary Senior, a UCU Scottish official, said: "Following the Scottish Government's commitment to higher education in the budget, we question the need for such drastic cuts in the proportion of staff.
"This will have a severe impact on Galashiels in terms of job losses, but also because textiles are so important to the local economy. The textile college merged with Heriot-Watt to help it survive, but the university is again attempting to cut jobs rather than develop the staff."
The School of Textiles and Design, which dates back to 1883, shares the Galashiels campus with Scottish Borders College.
Formed from a merger of the Scottish College of Textiles and Heriot-Watt University in 1998 to enable the School to grow and to build up Higher Education provision in the Scottish Borders, Heriot- Watt University instead pushed through substantial cuts in 2003 and threatened to move the school from Galashiels.
The university said it was working closely with the staff and unions to ensure there were no compulsory redundancies.
A spokeswoman from Heriot-Watt University said: "As part of the wider university's continuing review of its operations, the School of Textiles and Design at Heriot-Watt's Scottish Borders Campus has developed a five year plan designed to ensure the continued financial sustainability of the school, its teaching and research excellence, internationalisation and the provision of an excellent student experience.
"The plan, which is based on thorough reviews of the School's operations and research profile, recognises the need for savings and improvement of income streams in light of the current overall School deficit. It will focus on core, financially sustainable activities, a restructuring of the staffing profile, an increasing focus on research activity and improving international student recruitment.
"As part of this process the school is undergoing a consultation on implementation of the plan including more flexible staffing arrangements such as redeployment and overall working hours. The University is working closely with the staff and the unions to ensure that the changes can be met through voluntary means where possible."
Liberal Democrat candidate Rick Kenney broke the news at a hustings meeting in Galashiels on Monday night, when candidates in the forthcoming local government elections highlighted the town's links with the university.
Independent candidate Bill White, chairman of the community council, revealed many local businesses relied on the student trade to survive.
And Conservative candidate Fiona Lackenby, a sitting councillor, said she was "disappointed" to hear of any planned job losses.