Workers have been warned of redundancies as Argyll and Bute Council tries to cut spending in its roads and amenity services department.
Staff and unions have been told that a £445,000 cut in spending is likely for 2013-14 – and double that amount the following year.
Managers say that fixed costs including the waste contract and £12m landifll tax mean more needs to be cut from other budgets.
A newsletter to sent to workers refers to the tough financial climate, adding the savings would come from vacant posts and voluntary redundancies wherever possible provided operational effectiveness can be maintained.
“Potentially redundant employees will be matched to subsequent vacancies which may be suitable,” adds the newsletter from head of roads and amenity services Jim Smith.
“However, if we cannot make the savings we need to by voluntary redundancy, compulsory redundancies will need to be considered.
“This is the last option the council wants to use to make any savings.”
The council’s budget proposals for all departments are expected to be made public on Thursday, and a three-month consultation period with trade unions is expected to start on February 25.
A spokesperson stated: “The newsletter has been sent out to staff in advance of the budget papers going out at the end of the week and was produced with input from the union.
“Any budget savings are subject to the council budget meeting in February and we will be working closely with staff and the trade unions to mitigate the impact on individuals.”
In December the council placed a budget simulator online as part of its public consultation, stating that £40m needed to be saved over the next seven years