Almost one if five council jobs in Wales have been axed in the last 10 years, according to the latest analysis.
The Public Sector in Wales report found 37,000 local government jobs have been lost since 2009 as a result of £1bn of cuts.
Welsh council leaders say local services are no longer able to absorb further budget reductions without 'devastating' implications for service delivery.
David Poole of the Welsh Local Government Association said: 'The council workforce has borne the brunt of austerity more than any other sector.
'Despite the increasing demands placed on them, they have continued to deliver the services that are vital for the wellbeing of our communities.
'However, the ability of the workforce to shoulder such cuts without the delivery of vital services being affected, such as social care and education, is now at an end.'
The association's finance spokesperson Anthony Hunt added: 'The pay bill for providing vital local services is £3.6bn and we have to invest that to keep schools, day centres and treasured local facilities running to provide the support and services that people need on a daily basis.'