The Independent Monitoring Board report said between September 2013 and August 2014 less-experienced officers were supported by fewer senior officers.
Board chairman Nick Adams said he was concerned senior staff were leaving while cheaper employees are taken on.
The Ministry of Justice said new prison officers were being trained.
The spokesman said after receiving extensive training, they are mentored by an experienced staff member for at least a year.
The report said there were also "significantly fewer" officers on each wing to care for and manage prisoners.
It said the reduction of experienced supervising officers has had a "significant negative impact on the care and safety of prisoners".
Observations by board inspectors suggest the "incidence of bullying, low-level violence and disobedience by prisoners has increased".
Nick Adams, chairman of the monitoring board, said:  "There have been very large cuts to budgets available to the prison service.
"One way to reduce the cost is to pay off large numbers of experienced staff and employ younger people starting on lower salaries."
Budget cuts are leading to a large drop in the number of experienced officers at Chelmsford Prison, harming the care of inmates, a watchdog has warned.