Thirty extra paramedics are to be taken on by East Midlands Ambulance Service, despite it having to make �9.5 million of cuts.
Up to 50 managers and backroom staff could lose their jobs to help the service make savings, but the extra paramedics will help to cut the cost of overtime.
Managers say the additional staff will also help to ensure that more ambulances are manned by paramedics, rather than less qualified technicians.
Emas is also likely to sell off some of its buildings and cut back on its contracts with volunteer organisations for patient transport.
David Farrelly, deputy chief executive of Emas, admitted the cost-cutting plan was "a major challenge".
He said the decision on what would be cut would be made "in the next few weeks".
Mr Farrelly said having extra highly-skilled paramedics would lead to a better service for patients because more ambulances would be able to go out with one paramedic and one technician on board.
At the moment, some ambulances respond to emergencies carrying two technicians, who are not as highly qualified and cannot administer drugs, while a paramedic arrives separately in a car.
Mr Farrelly said: "Having a paramedic on more vehicles who can give the right treatment with the right drugs at the right time has got to be better for patients. As a service, we need to be as efficient as we can and we recognised that we needed more frontline staff.
"I see this as a new start for us and it allows our staff to be utilised better and to do what they have been trained for."
It is estimated that employing more paramedics will save the service more than �3.2 million in annual overtime costs.
The service has had an increase in funding this year from primary care trusts across the East Midlands, to �160 million, but the cost of fuel, VAT prices and responding to a rising number of emergency calls means it has to budget for a �9.5 million shortfall.
Emas employs more than 1,000 paramedics and 360 technicians to serve the six counties it covers. The service receives about 680,000 emergency calls a year.
Zuffar Haq, a spokesman for the Leicester Mercury Patients' Panel, said: "It's a start, but in the scheme of things 30 doesn't seem very many. I would like to see an extra 30 paramedics in each county of the Emas region."
A "transformation board" has been set up to make sure any cost-cutting does not affect patient safety.
Dr Mike Pepperman is chairman of the Emas working group set up by health watchdogs the Leicestershire and Leicester City Local involvement networks.
He said: "Emas does seem to want to protect its front-line staff and increasing the number of paramedics at the cost of managerial staff seems to be a constructive approach.
"I think this savings plan is a good start and it probably is achievable with the support of staff and other organisations it works with, such as Leicester's hospitals."
Emas was fined �5 million earlier this year because it failed to meet response time targets to both emergency and urgent calls.
A few weeks later it was announced that chief executive Paul Phillips had taken early retirement.
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