There has been a lot of immigration over the last three years which will reverse as people return to their own countries, the Local Government Association (LGA) says.
In a recent report by the organisation it was revealed almost two in five of the jobs which are at risk over the next two years are in London and the south-east.
A spokesperson for the LGA said currently positions made available by retirement or redundancies are not being filled but when migrants leave there will be vacancies.
"We expect to see rehiring picking up slowly in 2010 but we are looking at 650,000 total jobs lost in the economy and staff by 2010," he added.
The report also showed the hardest hit industries will be construction and manufacturing, while high-skilled industries will be relatively unscathed.
According to the Office for National Statistics, there were 589,000 job vacancies in the three months to October 2008 a decrease of 40,000 since the previous quarter.
