The Scottish Rugby Union are set to make swingeing cuts in staff to ensure the stability of the game.
SRU chief executive Bill Watson has informed staff that up to 10 per cent of employees could be made redundant as part of an extensive cost reduction programme.
Watson believed the cuts were necessary to compensate for the lack of revenue annually garnered by the autumn Test series, which will be postponed this year as the World Cup is played at the same time in Australia.
He said: "This is a very painful process, all the more so because we do value our staff, who are highly motivated to work hard and deliver for Scottish rugby.
"At a domestic level, we have delivered record revenues which, in turn, have led to record investment in Scottish club rugby, sustained two professional teams, introduced a third to The Borders and increased sponsorship values over two years by 70 per cent to more than Stg£4million.
"But the facts are that we have seen a downturn in the global economy. Sponsorship and television rights revenues internationally, specifically at Six Nations levels, have not met expectations.
"As we anticipated, the Rugby World Cup in Australia in October and November this year means we lose the revenue we would generate normally from our Autumn Tests and that has a huge impact on our business"
The SRU has requested voluntary redundancies and early retirement to help the financial problems at the SRU while salaries will be frozen for 12 months for those staying.
The SRU currently employs about 220 full-time staff, including players and management in the professional teams with 110 employed at Murrayfield and around the country in support roles.
Professional team costs will also be subjected to the same scrutiny as other areas of the SRU.
The SRU has worked hard over the last four years to substantially reduce its borrowings - down from a peak of #17million in 1998 to #10.4million currently.