The Isle of Wight Council has said it is likely to shed 205 jobs to help plug an £8m shortfall in funding during the economic downturn.
The council said the move would help keep any rise in council tax on the island as low as possible and was part of a drive to become more efficient.
It said £3.7m of the deficit was due to government under-funding of the free national bus pass scheme for over 60s.
The cuts equal 7.6% of the council's 2,689 staff, excluding teachers.
The council's total budget for the year is £149m.
About 135 posts are likely to go in the current financial year, including a number already earmarked in a recent restructuring of the council's senior management.
The cuts will also affect the children's services directorate, as part of an ongoing review of staffing in the department.
A further 70 posts are likely to go over the next three years, as a result of changes to the way the council manages its human resources, payroll, finance and procurement functions.
Isle of Wight council chief executive Steve Beynon said: "We fully intend to continue to manage this process as carefully as possible and to give support to staff, with compulsory redundancies being the last resort."
The council said it had pledged to consult fully with staff union Unison.