Aberdeen City Council will have to make about £120m of savings over the next five years, it has been announced.
The council said it expected its government grant would be reduced by at least £80m up to 2014/15 and would face £40m of "additional cost pressures".
A five-year business plan is being drawn up "to address the severe financial constraints on the public sector".
The council said its aim was to continue to deliver essential services.
There are already plans to withhold part of a staff salary rise this year.
A consultation with staff and unions has been ongoing for the past three months, and members of the finance committee last week voted 10 to four in favour withholding the incremental rise.
It was deferred to the full council on 30 June.
However, unions have warned they would consider both legal and industrial action.