Anzhi have failed to win any of their first four games of the new Russian season and former Manchester United coach Rene Meulensteen is set to be sacked after just 16 days in charge.
The club, who are based in the volatile Russian republic of Dagestan, have spent millions on players since being taken over by billionaire Suleiman Kerimov in January 2011.
Samuel Eto'o, Lassana Diarra, Aleksandr Kokorin, Igor Denisov, Willian and Christopher Samba are among the superstar players who have been brought in for big money.
However, according to Sports Express in Russia, Kerimov experienced health problems after the club's embarrassing 1-0 home defeat to Rostov on Friday and has decided to pull the plug.
The club's president Konstantin Remchukov confirmed on Twitter that the club was going to slash the budget.
"The main news is that Anzhi will undergo a reformatting," wrote Remchukov.
"Many of our expensive stars will leave Anzhi, while the club's budget will be decreased to $50-$70 million (£32.5-£45.5m) a year.
"We failed to clinch rapid success. Now Anzhi will develop its academy according to the medium-term plans of club development."
It is believed that Kerimov has already met with the club's players and told them of his plans.
Sports Express says he informed the players he will meet his financial obligations to them while trying to find them new clubs.
Striker Eto'o, who is still only 32, is the club's highest profile player but also said to be the best paid player in the world on a reported wage of £350,000-a-week.
The Cameroon man, who helped fire Barcelona to two Champions League titles (2006, 2009) and Inter Milan to one (2010), has one year remaining on his contract.
Attacking midfielder Willian was the club's record signing when he joined from Shakhtar Donetsk last season for a reported fee of £30.8m. The Brazilian is only 24 and is another who is likely to have plenty of suitors on the transfer market.
Dutchman Meulensteen only took charge of the team on July 22 following the departure of Guus Hiddink but it looks like his spell in Russia will be short-lived.
Gadzhi Gadzhiyev - current manager of Krylia Sovetov Samara – is expected to take charge.
We asked Aleksandr Aksenov of our Russian office to give us a bit more information...
"Anzhi owner Suleyman Kerimov has put the entire first-team squad up for sale due to his health getting worse. Anzhi will focus on developing their youth academy after failing to achieve quick success. Also there will not be any discounts for current Anzhi players. Alexander Kokorin, Yury Zhirkov and Igor Denisov will likely be Dynamo Moscow players in the very near future. There is some talks from Russian journalists that Samuel Eto'o is going to stay until the end of his contract in June 2014. German Tkachenko, another Anzhi board member, insisted the reduced spending will not impact their ability to be competitive."