More than 50 people are set to lose their jobs after managers confirmed the Britannia Café and Park Britannia in Norwich will close this week.
The social enterprise helps convicts both serving time in prison and after their release by providing them with work rehabilitation.
The café will cease trading on Friday and staff were informed this afternoon.
The closure comes as the Ministry of Justice served a notice to management saying that they needed to vacate the café.
A manager, who has asked not to be named, said: "This place has given me a new life and the same to my family. I don't know how I'm going to pay the bills.
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"I was still serving my time in prison when I began working here. At that time I was scared to be released but because of this place I felt comfortable.
"All the prison can do is give you a shove out the door which is why people turn back to crime. A lot of people have avoided that because they can keep working here and have somewhere to earn."
Park Britannia, which is based in Waterloo Park Pavilion, is also set to close.
The Britannia Café has been trading out of its site beside HMP Norwich for five years.
The manager continued: "I began working here more than four years ago and I've worked my way to the top. I don't know what I'm going to do next, I'll do whatever I can to pay the mortgage."
The café is a community interest company, meaning all of its profits are either reinvested into the business or the community.
The senior member of staff said: "It's going to be really difficult for the people who are still serving time because when you talk to your parole officers you need evidence that when you get out you'll be able to pay rent and find a way to support yourself. This will take that opportunity away from the staff here."
The Café Britannia has a number of conference rooms at the site overlooking Mousehold Heath and a small shop.
The Ministry of Justice did not comment.
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