The club sacked 10 Academy staff last week and another six long-serving employees left in the last few days.
Distressed former employees with well over 150 years service between them argue they've been given no valid reason for the termination of contracts and are unhappy with the club's first offers for pay-off packages.
Liverpool are now braced for a series of courtroom challenges to the decision, with most of those sacked preparing unfair dismissal claims.
The Merseyside club face massive compensation bills and that's come at the worst possible time for owners Tom Hicks and George Gillett given their perilous financial situation.
Liverpool argue most of the dismissals are a series of cost-cutting measures overseen by new finance director Philip Nash, particularly at Academy level, with the club trying to reduce staff expenses by up to as much as £2million a year.

Benitez plans to replace some of them by adding to the Spanish contingent at Anfield.
A Kop source said: "You've heard of the night of the long knives. This is more like two weeks of it and it may not be finished yet.
"Rafa wants a clean sweep, but some of the staff won't go quietly and are taking legal advice. Some of them don't even feel they've been told why they're going."
The first round of departures included reserve coach Gary Ablett, Academy director Piet Hamberg and youth coaches Dave Shannon and Hugh McAuley.
Shannon will have a strong claim against the club having been cited in the recent autobiographies of Steven Gerrard, Robbie Fowler, Michael Owen and Jamie Carragher as a major influence on their careers through the youth ranks.
In recent days the departure of six Melwood staff has been confirmed, including physio Victor Salinas, the club's players' liaison officer who has been at Liverpool for 14 years, and even the kit man.
This article has 28 comments
Rafa's our best asset by far. He'll produce another Barcelona Football Academy in just a few year's time. Kyalo
By Kyalo Nguku. Posted June 14 2009 at 10:08 PM.
Rafa's our best asset by far. He'll produce another Barcelona Football Academy in just a few year's time. Kyalo
By Kyalo Nguku. Posted June 14 2009 at 10:00 PM.
A good manager makes tough decisions. Rafa is a good manager. The Academy is not producing anywhere near the number of high quality players that it should for the amount of money, time and staff that is invested in it.
Therefore Rafa has no option other than to clear it out and replace with better. So what if they've been in the last 3 FA Youth finals. The set-up isn't to win Youth cups, it's to produce class Premier League level players.
By andy williams. Posted June 14 2009 at 11:05 AM.
Ive know Tim Dittmer (academy goalkeeping coach) pretty much since he was born and he is an amazingly dedicated member of Liverpool FC. He does not deserve to be unceremoniously dumped in this manner, and neither do his colleagues. They are the ones who make that club what it is. SHAME ON YOU RAFA, SHAME ON YOU INDEED.
By Lauren. Posted June 9 2009 at 12:55 AM.
In the financial climate, Rafa is doing the right thing, by replacing these staff. Kenny is back isn't he? Rafa wants the good time back at Anfield, it's a shame (apart from the palyers) that there aren't many others wanting to follow suit in the Club set up (apart from the fans). This is a great move, wanting to produce strong players with flare in the Rafa style. He's committed to the cause and so we all should be as a liverpool fans, admirers and sponsors. Yanks, take the hint and make us proud, if not SELL to someone who wants the Anfield faithful to be glorious once more. Lastly even though we did not win anything, we should be proud and excited of what lays ahead for us.
By Rob. Posted June 8 2009 at 3:15 PM.
Obviously im a united supporter but im not here to poke and make fun of you lot.
This is a major concern for me, so many average mid to late 20's foreigners taking the field instead of young British talent.
its not just happening at Liverpool but many other clubs, but as a supporter of football on general i would much rather see some young players with potential grow over the years instead of mediocre foreigners replaced by other mediocre foreigners.
and on the fact that sacking people that show the passion for a club they love to be sacked and they are now used as a scapegoat for a manager that will not take blame for a club he has managed for over 5 years.
By Reddevil. Posted June 8 2009 at 2:35 PM.
I dont see why people complaint rafa for good players not coming out of the academy. he has been here only for five years and during that time he had no control over the academy. I think he understood well that liverpool does not have financial muscle to fight with other clubs in europe to sign top players. one way to solve the issue is, to enhance the young talents he is signing for the academy. so, if people dont deliver they should be sacked. why should we keep blaming rafa for what has been not been his responsibility? atleast we should be happy that he has seen the problems of the footballing side, and decided to put things in right perspectve. why people are not seeing that he is replacing all these sacked people with the people with right credentials.
One more thing, In recent history when did Alex Fergusen pick fight with Liverpool Managers? Only this year in a long long time. Another sign that LFC is really back where it belongs... so all those who really call them true supporters should support Rafa and the club during this period, not otherwise.
Remember YNWA
By el nino. Posted June 8 2009 at 12:51 PM.
To all people saying the academy is not producing etc. it's not due to the staff not doing their jobs..our youth team have won 2 out of the three fa youth cups in the last three years, only losing to arsenal in 2009. Its about players not been given a chance. As an ex player myself i know how hard it is to make it but we've had players over the past who were stand out players at the academy. These players where never given a chance by our managers and the policy of buying in youth players is rife at LFC and others...even look at MUTD they have makeda (bought), the two brazilian twins (bought) yes the have welback and the young defender but i seriously doubt those players would've been given the chance at LFC, and don't get me started on Arsenal..how many young top quality ENGLISH players have they produced in the last 10 years? All their young players are foreign. ones thing for sure...sacking a long serving kit man, education officer, physios and liasion officers is a joke, you can't tell me that was for footballing reasons... One think that does let the academy down is its proximity to melwood, its miles away so rafa doesn't see players on a regular basis and i feel it is this not the coaches that stop young players progressing. How can the manager know what players have the spark needed at premiership level if he very really sees them and trust me, he very VERY rarely sees them until they arre too old for the youth teams and then move to melwood, but by then its too late!!
By Peter. Posted June 8 2009 at 12:14 PM.
I am good with this. These are men who have been around for 115-20 years. The time we hav not won any leage title. Don't they have to share the blame??? Since Gerrard what GREAT player has the academy produced??
So STFU and go away quietly if you are really loyal to the club..
By Iman. Posted June 8 2009 at 10:25 AM.
its not called liverpool academy anymore its called the spanish academy. a job is only as good as the tools given so lets start with the scouts. books like gerrards or carra who by the way hugh is also in . hugh u will be missed well done for the final of the youth cup. raffa must be mad letting u go am sure u will be snatched up very quickly. hugh has always worked very hard. gerrard and carra became very rich from writing a book of lies raffa u have made a big mistake he has done so well u just need to stop buying spanish and blaming other pepol . i will be watching the u18 and u16 to see how u haved boobed. open your eyes LFC surporters.by tony
By liverpool surporter for 25 years. Posted June 7 2009 at 11:59 PM.
I wonder if raffa started at the top and sacked the 2 muppets from the states things would then start moveing in the right direction
By caroline carmody. Posted June 7 2009 at 10:12 PM.
The wheels are falling off. AGAIN. So frustrating for the supporters - but great for everyone else. Keep up the clown convention LFC. Awesome.
By Andrew. Posted June 7 2009 at 9:45 PM.
Yes we haven't had the best youth players for a while,so maybe rafa will work alongside Dalgleish with the academy.we need good english youth as well as a european quality players,with pace flair and true passion for our premier league.a blend of dutch and norwegian craft.with a bit a spanish style. we cant compete in the transfer market,so sort the academy to halt the inflated transfer market.thanks to millionaire chairmen who splsh the cash willy nilly for quick success!get things done the right way Rafa...we love you at Liverpool.
By Adrian Poole. Posted June 7 2009 at 8:44 PM.
Rafa got rid of Warnock and spent £7 million on Dossena. Ask any Premiership manager which player he'd prefer at LB. Weird.
To get rid of the men who brought through players like Owen, Gerrard, Carragher, Fowler etc, local men who've served the club with loyalty and dignity for decades, and to replace them with Spaniards who know or care little or nothing for LFC...
Utter madness.
Unless you're trying to make yourself unsackable. This smacks of empire building. Because if the time ever does come to sack Rafa, he'll take half the staff with him.
By Nick. Posted June 7 2009 at 8:47 PM.
Its true that the academy hasn't managed to produce any decent players since Gerrard. Warnock, Guthrie and Mellor have managed average Premiership level at best.
Liverpool are aiming for the Premier title, which we consider the hardest league to win in the world and the Champions League, the hardes cup to win in the world. that makes things very simple... you need better than average.
If the young English players aren't living up to the job, Rafa tries to bring in 16 year old foreign players to train up and he will be hoping that some of these come through.
Since nobody has yet come through, Rafa has had to buy players in to fill the squad. Its not Rafa's fault that the players are not coming through.
Lets face it... how many YOUNG English players are there that would shine in the Champions League. Rooney, Walcott & perhaps Ashley Young.
The players just aren't there to be had. Perhaps an academy shake-up will do the trick.
By Gary. Posted June 7 2009 at 7:55 PM.
This just show's Rafa has no class !!!
By Chris Sherlock. Posted June 7 2009 at 2:09 PM.
I think perhaps it is harsh to get rid of ppl that have served the club for a long time. But lets be honest. the quality of players coming through the youth ranks is of an average standard for any big club. I think the only player since Gerrard to come through the youth system that could and maybe should have stayed is Warnock. The likes of mellor and whitebread and guthrie are obviously just plain not good enough or they would be playing in the prem. mellor struggles to make his place in the Preston team. Like i said its harsh to get rid of ppl who have served the club for so long but at the end of the day they like anyone in any business need to produce results and its just not happening. liverpool should give them fare compensation to mirror the clubs appropriation for members that have sered the club for so many years.
By tim. Posted June 7 2009 at 1:16 PM.
Rafa's been here for five years, no new talent has come through the ranks for eight years. This spells something wrong on the academy.
Benitez was previously a youth team coach for Real Madrid, the biggest club in the world who have a quarter of their squad from their academy. Let Benitez sort it out!
By Farradin. Posted June 7 2009 at 1:10 PM.
If the sole reason is cost cutting it may be prudent to reduce the 60 plus players based at Melwood. Raffa has signed a huge number of bit part players, the majority are nowhere near up to reaching even the bench. It seems to be a case of buy a bunch and hope a gem appears. The reality of course is a total lack of opportunity. This works back to the Academy as Raffa, and Houlier before him, peeved at his lack of authority over the Academy up till now has turfed out the last remnents of the Liverpool Way. No ex Academy player has had much of a chance at first team level as even at reserve level priority is given to second rate bought in players. On a different note I think Raffa should really review the company he keeps, he reresents Liverpool Football Club, not the Liverpool Sunday League.
By john. Posted June 7 2009 at 12:53 PM.
Liverpools academy has not resulted in new players cos Benetez just buys latin all the time. No one else gets a look in. Then he sacks the long serving staff who love our club!
By ScouseLad. Posted June 7 2009 at 12:22 PM.
surely the last player through the academy was guthrie and mellor and not gerrard... how can the academy expect to produce when rafa keeps signing awful squad players and selling the kids on... whitbread, guthrie and mellor have all gone elsewhere for football.
yes rafa can choose who he employs and who he sacks but he also has to comply with employment laws.
rafa has lost the plot.
By pedro. Posted June 7 2009 at 11:26 AM.
we support rafa!!!
By ynwa. Posted June 7 2009 at 10:30 AM.
Simply Academy is permorming as expected. Gerrad is the last player from Academy. Man. U & Arsenal Academy is much better. Even Leeds Utd. academy is performing much better than LFC!!! Therefore some of the old staff should be replaced.
By Manas. Posted June 7 2009 at 9:07 AM.
Another nail in Liverpool's coffin.
What is this once proud club coming to? No wonder Everton can claim the title People's Club.
Things like this don't happen in Liverpool.
LFC is fast becoming a ruthless, heartless, foreign franchise money machine with absolutely nothing in common with it's (minority) scouse support.
By BB. Posted June 7 2009 at 8:41 AM.
let's boycott the place.
By thesoulisone. Posted June 7 2009 at 8:24 AM.
No one like to be losing your job but football is NOT government job where you can not performed and expect to keep your job.
It is cut throat business and it should be done as ruthless as needed as the millions of fans expect every single money is spent on improving the squad.
If those people are good as they think they are to think they deserved a place at Liverpool FC, then they should have no problem getting employment somewhere else.
That should warn everyone left to buck up and work harder.
By Patrick. Posted June 7 2009 at 1:58 AM.
i dont blame rafa for cleaning out the academy with gerrard being the last player to move into the first team shows the academy is not working simple answer is to bring in a new style which cant not be done with the same staff
By paul wright. Posted June 7 2009 at 12:14 AM.
Interesting to note that the U-18 and U-16 coaches have pretty much been in situ at Anfield ever since our last title win. So perhaps there is some logic in sweeping them out. Also 5, if not 6 of these people appear to have joined the club under Benitez - given the speed with which he sells players who don't make the grade, it can't come as a big shock that these people have been drummed out after a short time at the club - if he feels they aren't the right people, he won't hang around.
By Andrew . Posted June 7 2009 at 12:13 AM.