Up to 2,000 jobs could be axed by Birmingham City Council during the next financial year.
The council, the largest local authority in the UK employing 52,000 people, said it had to make savings of up to £69m by April 2011.
The likely cuts are based on an assumption unions will agree to a pay freeze, with the council saying there could be more jobs lost if not.
A Unison spokesman said the workforce had been treated with "contempt".
But council leader, Conservative Mike Whitby, said money had dried up, and they had to do "more for less".
Birmingham is run by a Conservative and Liberal Democrat coalition, with the Tories the largest partner.
Reports have been circulating for some time about job losses.
Roger McKenzie, regional Unison officer for the West Midlands, said two weeks ago the council had started a process of announcing specific cuts.
"We started to question them about this and they went quiet," he said.
"We didn't hear anything for a while and then we hear, through the media, about these jobs going.
"Its outrageous, its no way to treat your staff."
However, chief executive Stephen Hughes said the council was facing "a very large challenge".
"In my time in public service this is probably the biggest challenge we are ever going to face," he said.
Staff in several departments have been sent letters asking if they wish to take voluntary redundancy and the council has said it hopes most losses can be made through that or early retirement.
Council leader Mike Whitby said: "Quite simply we have to do more for less.
"Birmingham is demonstrating how frontline services and significant regeneration schemes can be delivered without punishing taxpayers.
"I am proud that we are able to do this."
Workers in the children and young people's department are expected to bear the brunt of the losses.
The council has said teachers or social workers are not under threat.
Other areas which could be affected include day care centres, residential homes for the elderly, sport and leisure facilities and libraries.
The council has also identified several areas where it can increase its revenue.
These include looking at what can be done to increase revenues at its cemeteries and crematoria, vehicle recovery and parks, museums and libraries departments.