Organisation has been hit hard by lockdown
Help for Heroes is to cut staff by a third after its income dropped by nearly one third.
The charity, which relies on public donations, says 142 roles will be cut.
Since March public fundraising events have had to be cancelled or postponed.
Three of its recovery centres - in Yorkshire, Devon and Essex - will remain closed indefinitely as Help for Heroes focuses on face-to-face community and online-based support.
The charity said demand for its services rose by 33% during May and June - compared to the same period last year - as the consequences of the national lockdown impacted on veterans' mental health.
Requests for help with physical conditions also increased by nearly a third over the same period.
Meanwhile, the charity - which furloughed 130 staff at the start of the pandemic - said it anticipates funding will remain down by at least a third for the foreseeable future, as the economy struggles to recover.
Melanie Waters, its chief executive, said a major restructure was the only way the charity could continue with its work.
"In 2007, we made a promise on behalf of the nation to provide lifetime support to wounded veterans, and their families, and we are striving to keep that promise," she said.
"The crisis has had a devastating impact on the whole UK charity sector, with lasting consequences, and it has hit us hard."
Last year, the charity - which was set up in 2007 by former Army Captain Bryn Parry and wife Emma - raised around £27m.
"We remain absolutely committed to our wounded and their families and will continue fighting for, and changing the lives of, those we support for as long as they need it," said Waters.