Dundee University has announced plans to merge three schools and “streamline” degrees to save millions of pounds and limit job losses.
The announcement, sent to all staff on Tuesday, means an estimated 34 positions will be cut.
Bosses hope enough staff opt to take up voluntary redundancy but have not ruled out making this compulsory.
The university says action is needed to address a previously forecast £15 million annual black hole mainly caused by reduced numbers of fee-paying students.
The overhaul would result in the merger of the Schools of Education & Social Work, Humanities and Social Sciences, saving £3 million a year.
A university spokesperson said: “The university has many great strengths, not least in offering a student experience that is among the best in the UK and research which is making an impact around the world, including on Covid-19.
“However, we face significant challenges both in terms of financial sustainability and more consistent excellence in our performance across everything we do.
“A long-term plan for improving our financial position by £56m has been approved by the University Executive Group and Court.
“We have presented proposals around Academic Excellence and Structure to achieve part of the cost savings and growth.”
The schools merger would mean a reduction of 34 posts from a current academic staff base of 227.
The deficit would also be tackled through increasing international student recruitment, commercialisation, and changes to degree programmes.
The university had previously said pay cuts may be needed if grim predictions on the number of fee-paying students were realised.
However, the board has now decided no pay cuts will be enforced in the current financial year after stronger-than-expected enrolment figures.
The spokesperson added: “We are now consulting widely with staff to refine these proposals, including an online survey and open meetings.
“We will then bring forward more detailed implementation plans to enact the revised proposals in the New Year.”
Much like universities across Scotland, the institution was already facing significant financial difficulties before the pandemic.
It is one of the city’s biggest employers with an estimated 3,000 staff on the payroll.
