Around 40 disabled people will need somewhere else to live after their residential home closes down.
Care home bosses have announced the closure of Fairburn Chase in Castleford, which looks after people aged over 18 with life-long physical disabilities and brain injuries.
Around 70 full and part-time staff have been told their jobs are at risk after the decision by Exemplar Healthcare, which owns the Wheldon Road home.
The company said it had struggled to attract enough residents to make Fairburn Chase, which has 73 beds, viable.
Martin Kirkup, marketing director at Exemplar, said: “Fairburn Chase is a residential service with 73 beds and for quite a number of years we have been doing everything in our power to make it work as a service.
“We’ve made various improvements to try and attract more people. Unfortunately there hasn’t been enough demand for it. It remains significantly under-used and has for some time.
“We are no longer able to maintain it in future.”
People living at the home have their care funded mainly by the NHS and local authority.
Mr Kirkup said residents could be found alternative accommodation at other Exemplar homes, including Fairburn Vale and Fairburn Mews.
The two neighbouring units look after people with more acute disabilities.
Mr Kirkup said there was not a set deadline for people to move out.
He said: “We’re able to look after them until the best solution can be found for them. It will take as long as it takes.”
Staff had been told they were at risk of redundancy, although they could be found alternative jobs.
Mr Kirkup said: “Even though we expect a number of people to work in our other services, we’re obliged to make them aware.”
Rotherham-based Exemplar runs 25 care homes in Yorkshire, Humerside, the Midlands and North West and employs more than 2,000 people.
The company, which reportedly generated revenues of £55m in 2015-16, was bought out by private equity firm Agilitas last July.