Dundee University is to cut 632 jobs in a bid to address a £35m deficit.
Staff were informed of the news by interim principal Shane O'Neill at a meeting in the university, which was also held online.
The move represents about 20% of the university's workforce of more than 3,000 people.
Prof O'Neill said an external investigation would also be conducted into "what went wrong."
The University and College Union (UCU) Scotland said the news was a "hammer-blow to hard working and committed workers at the university."
The university admitted that the scale of staff cuts meant that it is "very unlikely that the need for compulsory redundancy will be mitigated entirely."
It added that it was now moving formally into collective consultation on redundancy.
The university said job cuts would be made in every school and directorate of the university.
He said this amounted to 632 full-time equivalent posts – 197 academic roles, 119 school-based professional services posts in schools, and 316 directorate roles-based professional services roles.
Prof O'Neill said: "The current financial crisis has challenged us to ask some very fundamental questions about the size, shape, balance and structure of the university.
"Getting there will not be easy and we are determined to take on board all relevant lessons from the past and the various factors that contributed to the current position."
UCU general secretary Jo Grady said staff were being made to pay the price for "egregious management failure."
She said: "It's four months since workers first learned that there was a problem, and it feels that very little has happened in the intervening period to turn the university around."
Further education minister Graeme Dey said: "Whilst Dundee is an autonomous institution, it is my expectation that the university engages fully with staff and makes every effort to protect jobs.
"Compulsory redundancies should only ever be considered as a last resort, after all other cost saving measures have been fully explored."
He added that the Scottish government had recently announced an additional £15m for the Scottish Funding Council to support universities, such as Dundee.
Former principal Prof Iain Gillespie told staff in November that job losses were "inevitable" and blamed "an extremely challenging period" for the UK higher education sector.
Prof Gillespie resigned a month later after the university defended a £7,000 business trip he took to Hong Kong with a colleague.
Amanda Millar, the university's court chairwoman, resigned with immediate effect last month.
Local members of the the University and College Union (UCU) Scotland are in the final week of a three-week strike over proposed job cuts.
The university said that factors including a "severe drop" in international student recruitment and an increase in National Insurance contributions were to blame for the deficit.
However, it added that internal factors including "inadequate financial discipline and control" and "poor capital planning and investment decisions" had also contributed to the situation.
Dundee West SNP MSP Joe FitzPatrick said: "The level of job losses being suggested is simply unacceptable.
"There still remains a lack of clarity about how the university ended up at this point and why these issues weren't addressed sooner.
"Staff who are hearing that their jobs are at risk deserve more transparency from the university."
Local Scottish Labour MSP Michael Marra said the news would be "devastating" for university staff and the city of Dundee.
He said: "I think this is probably one of the biggest redundancies in the history of Scottish higher education.
"What's clear is that there is a story of huge failure of leadership from the university over a period of years."