One in six workers at Leeds City Council could lose their jobs as part of the government's spending cuts.
The authority has revealed the workforce could be reduced by up to 3,000 as it aims to save £150m over the next four years.
A consultation document, which will be put out to residents, said it was "critically important" action to make savings was started now.
Council leader Keith Wakefield said he hoped to avoid compulsory redundancies.
He said: "So far we seem to have a very good response to the voluntary redundancy and that's the way we'd like to proceed.
"We're a very big council, we're a very big employer and I think we need to take that responsibility very seriously and do everything we can to make sure people aren't forced into redundancy."
Chancellor George Osborne revealed details of the Spending Review last month.
He announced £81bn cuts to public spending over four years in a bid to reduce the budget deficit.
The Leeds council consultation document states the council needs to reduce its budget by £150m over four years - equal to approximately 18% of its net expenditure.
It states: "Whilst we have four years to address this issue, it is critically important to take action now as we know that we'll need to find at least £50m next financial year alone.
"Our biggest area of spending is on staffing. It is inevitable therefore that we will see a fairly large reduction in overall staffing."
The council said it estimated that would mean a loss of up to 3,000 posts out of the 17,000-strong workforce.
It said other saving measures included examining funding to external organisations and reviewing the number of council buildings.
The Unison union, which represents council workers, said it would be keeping a close eye on the council as it cuts its workforce.
Tony Pearson, from Unison, said: "We are not looking for industrial action as a matter of course but we might have to be faced with going down that road.
"Our members and indeed the public that they serve expect Unison in particular to take the lead in defending public services and that's what we will do."