The Royal Shakespeare Company (RSC) is holding redundancy consultations with some employees, and its theatres will not fully reopen before next year.
Casual workers and those on variable hours contracts will also not be paid by the RSC from November.
While the company’s programme of outdoor and online events will continue, the RSC will not stage any full productions before next year.
The company’s artistic director Gregory Doran and executive director Catherine Mallyon said in a statement: “Despite our wish to reopen our theatres by the end of the year, it is now clear that the ongoing pandemic and the continued need for social distancing mean that we will not be able to stage full RSC productions in our theatres before 2021.”
They added: “It is with great sadness that we have now reached the stage where a formal consultation process with employees must take place to safeguard the long-term future of the company.
“We had hoped that things would have become more positive by now, but this has not been the case.”
The company has not confirmed how many members of staff could be impacted by the proposed redundancies.
“Every one of our colleagues makes the RSC the company that it is, and every one contributes to its success,” Mr Doran and Ms Mallyon added.
“They show exceptional talent, professionalism, skill, commitment and care at all times and we thank them for their ongoing support.”
Trade unions were given advanced notice of the redundancy consultations on Thursday before they formally begin in October.
Mr Doran and Ms Mallyon said they hope a review of social-distancing measures “will bring positive news for the industry”.
In June, Ms Mallyon told the PA news agency that putting on performances with social-distancing measures in place is “not financially viable”.
She added that theatres need to be close to their capacity “to get the financial model to work”.
Earlier this month, entertainment and media union Bectu said there have been 5,000 coronavirus-related job losses in the theatre industry.
In July, the Government announced a £1.57 billion support package for the arts.