UP to 19 jobs are to be axed at Blackpool Transport.
The posts are being lost in the engineering department which currently employs around 105 people at the workshops in Rigby Road.
Bosses are hoping to avoid compulsory redundancies and consultation is currently taking place involving unions.
A reduction in the number of heritage trams and the bus fleet is being blamed for the need to cut jobs.
Managing director of Blackpool Transport Trevor Roberts said: “With the implementation of the new tramway system and the significant reduction in the operation of the heritage fleet, together with the reduction of the bus fleet, the company has reviewed its business needs and requirements and with that the staffing levels required for future operations.
“There are potentially up to 19 positions at risk but the company is consulting with the trade union on a process that will look at voluntary redundancy and redeployment in the first instance.”
Mr Roberts added: “We are quite hopeful we will be able to resolve this without any compulsory redundancies.”
Among the 19 posts at risk, are a number of seasonal jobs which were due to finish in November when the tramway closes for upgrade work in the winter.
However Blackpool Transport will be creating 90 new jobs ahead of the launch of the new tram service which is due to come into operation next Easter.
Around 40 drivers and 50 conductors will be required, with the possibility of recruiting more conductors on a seasonal basis to meet peak demand during the summer.
Mr Roberts added; “We are generating at least another 80 or 90 full-time jobs for new trams because they will run at a higher frequency and the service will be all year round.
“For the last few years the trams have stopped running in the winter.”
Recruitment for the new jobs is expected to take place internally initially, but if drivers transfer from the buses to the trams, that will create vacancies for bus drivers.
The new drivers and conductors will work out of the Starr Gate tram depot.
Blackpool Transport currently has a total workforce of around 570 people.
The Unite engineering union is representing the Blackpool Transport workers, but no-one was available to comment on the proposed redundancies.
In January 2010, Blackpool Transport made 56 drivers redundant after reducing services.
This year the company returned a small profit of £4,000 after making losses totalling £1.6m the previous year, but that included a reassessment of pension commitments.
However income had dropped by £2.2m with the closure of the Promenade and a truncated tram service being blamed for the loss of income.
The first of the new trams arrived in the resort in September and is currently being tested on the line.
The next batch of up to three trams is expected to arrive from the factory in Germany some time at the end of November.
Blackpool secured public funding for the £100m upgrade of the track and the purchase of new rolling stock after it was feared the existing tramway could be forced to close.
The new service is key to the town’s regeneration.