Cross is one of three members of the backroom staff being laid off as promotion-chasing Oldham bid to reduce their losses.
Long-serving youth-team coach Billy Urmson, who has been with Oldham for 27 years, is also to leave, along with youth development education and welfare officer Jack Edwards.
"
These redundancies are something we would have liked to avoid
"
Oldham chief executive Alan Hardy
Cross's playing career took in spells with Oldham, West Ham, Manchester City, West Bromwich Albion, Coventry and Norwich City.
The 52-year-old was promoted from coaching the reserves and youth-team to become number two to Iain Dowie last summer.
Latics' chief executive Alan Hardy said: "These redundancies are something we would have liked to avoid.
"But due to increasing financial pressures it was necessary that economies were made through all departments, including coaching, as well as the recent redundancies from players, administration and groundstaff.
"I have known Billy and David as friends for a number of years and to have to sit down and discuss redundancies with them has not been easy.
"We have enjoyed some wonderful footballing moments together.
"I would like to place on record my sincere thanks for the all the hard work and dedication put in by David and Billy over their many years association with the Latics," Hardy told the club's website.
Cross and Urmson are in talks with the club over a redundancy settlement.