Wolverhampton City Council is to cut 2,000 jobs, it has revealed.
The number represents one in every five people it employs, but the local authority says it has to make this tough decision due to the coalition's cut to its grant.
Although local government can raise money directly through council tax, the central grant from Westminster forms the majority of its income.
Andrew Johnson, cabinet member for resources, said: "We have lost a huge proportion of the main source of our income, which is the grant from the government. That's why we have to make these job cuts.
"The job cuts will be across the council except in some essential services such as children's social work. We are offering voluntary redundancy."
He said that while the job losses would be phased over the next five years, most would go in the next two.
The depth of the cuts provides further proof that the austerity drive is still going on despite the government boasting of an economic recovery being well under way.
It also backs up claims that cuts are being targetted at poor areas, with Johnson saying:
"Wolverhampton is the 20th most deprived area in England. We have been targeted more than the wealthy areas.
"But we have a duty to the people of Wolverhampton to set a balanced budget and we are determined to do that."