Unions at Glasgow University say they are shocked to discover that managers want to shed 250 of the institution's 5,800 posts to tackle a £7 million deficit.
But Sir Muir Russell, Glasgow's principal, said: "The terms we are going to offer will demonstrate that we really are very, very serious about this being managed in a very civilised, grown-up way. Glasgow is a good employer."
Over the past year, senior managers have been asking what strengths they should back. "You have to ask whether there are areas that aren't hacking it in some way in terms of contributing to what we want the university to be."
The unions are particularly dismayed that management has not ruled out compulsory redundancies. Sir Muir said this could not yet be done because management wanted to close its voluntary severance scheme in July. But he said he did not envisage enforced job losses and ruled out wholesale departmental closures.
Bill Stewart, vice-president of Glasgow's Association of University Teachers and convener of the joint union committee, said this was Glasgow's third voluntary severance scheme in a decade.
"We don't know what has happened," he said. "There were rumours that there was a substantial black hole in the finances. But we've heard these kinds of things in the past, so we weren't too worried."
Sir Muir, who took over from Sir Graeme Davies 18 months ago, said: "The university has not made a habit of balancing the books in the past few years."
He added: "This is really a very exciting opportunity for the university."
Glasgow had invested in staff and facilities by disposing of assets, something it could not rely on in future, he said. If the university took no action now, it would face "a quite significant imbalance" in coming years.
But Sir Muir stressed that Glasgow had not been blighted. It was filling 36 chairs this year, it had generated more than 20 new courses and it had joined pioneering Scottish research collaborations in physics and chemistry.
Although it was doing well in teaching and research, it was lagging behind in taught postgraduate courses and overseas student recruitment. "We're moving in the direction that many other universities have moved in," Sir Muir said.
At the time of going to press, the management and unions were still debating a planned joint statement on the voluntary severance scheme.