Up to 650 jobs are to be cut and 190 beds closed by an NHS trust that is trying to tackle debts.
Barking, Redbridge and Havering Hospitals NHS Trust, east London, said the measure would tackle a £24m deficit as 70% of spending went on staff.
The announcement comes after the Health Select Committee said it would hold an inquiry into the scale of NHS debt.
The Trust said the posts would be cut via natural wastage, redeployment and the use of fewer agency staff.
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I fully understand that this is a stressful time for staff
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A statement from the Trust said 70% of the job cuts would be from non-clinical staff.
The chief executive of the Trust Mark Rees said: "I fully understand that this is a stressful time for staff.
"But the financial recovery plan offers a sound route to a financially, and therefore, a clinically sustainable future for BHRT."
There have been calls this week for Health Secretary Patricia Hewitt to resign over spiralling NHS debts.