Financially stricken Cambridge have sacked director of rugby Bob Crooks and stopped paying wages to players.
The National One side survived a winding-up bid 13 months ago after raising £225,000 to save the club.
Less than half of the playing squad receive a wage for their services and those individuals will have to decide if they want to play free of charge.
"The decision is 100% a financial one," chairman Steve Bowller told BBC Radio Cambridgeshire.
"This hasn't come out of the blue to those at the pointy end. We're being proactive as opposed to reactive.
"Some of the players have indicated they will stay at the club but we're in negotiations with some of the others."
Former Saracens coach Crooks, who had recently been appointed director of rugby for the Eastern Counties, took charge of Cambridge two years ago, following the departure of James Shanahan.
He led them to fourth in his first full season in charge and leaves with the team, nicknamed the Blood and Sand, in 10th position.
Bowller, who led a committee to save the club from being put out of business in 2010, says the move to cut wages is for the long-term good of the club.
"We knew we'd be OK financially until the end of January but it looked like we'd have to make some dramatic cuts," he said.
"But the bank are supporting us and behind the decisions we've made. So everything is OK other than we can't afford to pay the players."