The service in Lincolnshire was established with support from Dementia UK in 2019 but has been funded solely by St Barnabas since 2022.
The charity said it had undertaken a comprehensive review of their clinical and support services as part of ensuring long-term sustainability of the trust.
In a statement, it apologised and said the decision had not been taken lightly.
The statement clarified that the hospice would still care for patients with dementia who have palliative needs.
The charity said staff members had been supported through a consultation process, but “sadly” they had had to make two nurses redundant.
Rebecca Franks, director of patient care at St Barnabas, said: “We want to express our deepest gratitude to both for their dedication, compassion, and the invaluable contribution they have made to our patients and their families.
“This decision is in no way a reflection of their efforts or commitment to St Barnabas,” she said.
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