The FSS has been government-owned since 2005
The Forensic Science Service (FSS) may eliminate up to 800 jobs, according to the Prospect trade union.
The Home Office confirmed that the government-owned FSS, which analyses evidence from crime scenes, is reviewing its staff.
"It is right that the FSS should put itself in a sustainable position for the future," the spokesperson said.
Prospect said that the FSS has talked about site closures and cutting up to 40% of its 1,900-member workforce.
The FSS is a supplier of forensic services to police forces in England and Wales and has been a pioneer in the use of DNA investigations.
It has been 100% owned by the government since 2005.
"The size of the company will depend largely upon the degree to which work is won or lost," the FSS said in a statement. "It is too soon, therefore, to say for certain what the final outcome will be."
The union suggested that any job cuts are designed to make the company more attractive to potential purchasers. "We will be scrutinising where these job losses fall to ensure this is not just an exercise to reduce the headcount leaving FSS denuded of the skills it needs," Prospect general secretary Paul Noon said.
Prospect said that no proposals have yet been tabled, but that it was told all terms and conditions of employment will be looked at, including pensions.
But the Home Office said that the company would have to change to survive.
"The FSS has today commenced a consultation with its staff and unions on the implementation of a wide-ranging transformation plan which is vital to the long term survival of the company," the spokesperson said. "This plan has been approved by the government."