The Abbey Theatre is to cut jobs as a result of a drop in funding and the economic climate.

The Sunday Tribune has learned that more than 25 jobs will be lost at the national theatre. Staff were informed of the redundancies at a meeting with management earlier this month.

The decision to lay off workers comes after a lengthy examination of the theatre's operations during the last six months by the director of the Abbey, Fiach Mac Conghail, and the theatre's senior management.

Abbey sources say external factors, including the economic climate, the resulting reduction in funding from the arts council and the uncertainty of any future three-year funding agreement, have forced the organisation into reviewing all aspects of its business.

Mac Conghail, while paying tribute to staff, said job losses were regrettable but were needed to protect the future of the theatre.

"Our decision to seek redundancies is extremely regrettable as the Abbey has a highly skilled workforce that has contributed enormously to the success of Irish theatre over the decades. The theatre itself is now a well-managed organisation and we are not currently in deficit. However, the times we are living in compel us to take action sooner rather than later to avoid an otherwise inevitable financial crisis in the coming years. Our goal now is to enter into negotiations with all employee representatives and we'll do so in the spirit of trying to save jobs and secure the future of Ireland's national theatre."

An Abbey spokesperson said the theatre had begun a consultation process with the staff and the trade unions to assess all the options available.

This year the Abbey will get €8.35m in state investment while bringing €40m annually into the economy. Audiences at the Abbey increased by 9% between 2006 and 2008. Thirty-two productions were staged, including seven world premières and four Irish premières, among them Conor McPherson's The Seafarer and John Patrick Shanley's Doubt.