HALF the staff of troubled Edinburgh tram firm Tie could be laid off as part of city council plans to cut project costs.
Some 35 of its 64 employees are understood to face the axe under a voluntary redundancy scheme announced by the company yesterday.
The move comes a week after The Scotsman revealed that staffing at Tie, the former Transport Initiatives Edinburgh, is expected to be dramatically reduced.
It follows the resignations of chief executive Richard Jeffrey, who left on Wednesday, and communications director Mandy Haeburn-Little, who will quit next month. Four of the company's directors are also to step down.
The council, which owns Tie, is due to decide at the end of this month whether to press on with or mothball the project, which faces a 200 million shortfall.
It is already planning a major overhaul of Tie, including taking much of the work in-house with the firm remaining little more than a name for contractual reasons.
A two-year dispute with construction contractors over changes to the building work has forced the initial tram line from Edinburgh airport to be scaled back to St Andrew's Square rather than Newhaven.
It is understood that behind the scenes discussions have been taking place with the Scottish Government to find a way of enabling the council to open at least part of the line. However, this may have to be through indirect means, such as extra borrowing, because SNP ministers have insisted they will not increase their 500m grant.
Some 440m of the 545m budget has already been spent.
Last night, a Tie spokesman said: "We can confirm that a voluntary redundancy scheme has been launched within Tie.
"This is only the initial pre-consultation phase and as yet, way too early to say how many individuals may be interested, or indeed, considered."
He said fewer staff were needed because only part of the tram route was being built.