Lower demand, a strong Australian dollar and steep fuel costs have put pressure on the airline, which warned that conditions are expected to remain volatile next year.
"The challenges we now face are immense, but we will overcome them," CEO Alan Joyce said. "The Australian international market is the toughest anywhere in the world."
Qantas said it expects to post pre-tax losses of between AU$250 million and AU$300 million for the six months ending Dec. 31.
In a bid to save AU$2 billion over three years, the airline plans to ax at least 1,000 jobs within 12 months, freeze pay for all employees and cut the salaries of Joyce and other executives.
The news sent Qantas stock plummeting, with the price dropping as much as 17 percent.
A range of measures to help the airline have been considered.
Last month, Australia's Treasurer Joe Hockey suggested the government may need to change rules that currently limit foreign ownership in the airline to 49 percent.
Earlier this year, Qantas attempted to boost its struggling international division by signing a 10-year partnership with Dubai-based rival Emirates.