Unions have condemned the British Council's announcement that it intends to cut up to 500 jobs over the next two years and consider offshoring work to India.

In a message to staff issued today, the British Council, which promotes the UK overseas, announced that it intended to reduce its staff by between 400-500 jobs – about one-third of the organisation – over the next two years. This would affect workers based in five offices across the UK – Belfast, Cardiff, Edinburgh, London and Manchester. Although a voluntary exit scheme has been announced, compulsory redundancies have not been ruled out.

Tony Fisher, branch secretary at PCS union, said: "Our members are understandably devastated by the news. With mortgages and bills to pay, they simply cannot afford to lose their employment in the present economic climate."

The announcement comes only hours after Lord Kinnock stood down as chairman of the council, citing a conflict of interest following his wife's appointment as Europe minister.

Mark Serwotka, PCS general secretary, added: "We are angry that we have been given very little consultation over these proposals and will be doing everything we can to ensure that no member is forced out of their job. It comes as a surprise that the British Council, whose remit is to promote Britain abroad, is even considering offshoring jobs.

"These proposed job losses, if not resisted, will add to the already rising unemployment figures and do nothing to help economic recovery."

However, Martin Davidson, chief executive of the British Council, said the job cuts were unavoidable due to external financial pressures. "The fall in the value of sterling, coupled with government requirements to reduce costs, have hit our finances. We must adapt to these realities if we are to safeguard and grow our ever-more valuable cultural relations work overseas," he said.

A statement added the cuts centred on a voluntary early retirement scheme for permanent staff, announced today, and would also include a significant reduction in temporary staff and contractors. The organisation also expects to reduce the number of posts overseas by several hundred.

"A final decision has not yet been made on the location or where jobs will be lost," the statement said.