UP to 40 bus drivers could lose their jobs in Huddersfield and Halifax.
The drivers have been told the jobs have to go as First West Yorkshire makes cutbacks.
And the job losses in Huddersfield will be the first among drivers for many decades.
Up to 20 posts are expected to be axed in each town.
The bus company has started a 30-day consultation period with unions representing the drivers and it is feared some of the redundancies will be compulsory.
The move comes after First lost several bus service contracts for the Elland, Stainland and West Vale areas.
They include the 343 Elland/West Vale run, and the 537, 538 and 539 routes covering Stainland.
It is understood the routes have been taken on by Centrebus, which took over Yorkshire Traction last year.
Centrebus, which is a transport company based in the Midlands, is expected to open a new base in the Elland area.
It already operates out of the former Traction depot in Waterloo, Huddersfield, running services under the Huddersfield Bus name.
There are about 220 First drivers in Huddersfield and slightly more in Halifax, which covers a vast rural area.
Officials from the Unite union are due to hold further talks with the bus company in the next few days.
First declined to comment on the job losses but a spokesman said: “We are all affected by the present economic climate and First is continually reviewing its position to hold down costs.”