St Mirren chairman Stewart Gilmour believes the decision to put newco Rangers in the third division could have devastating consequences.
The Scottish Football League rejected the appeal from the Ibrox club to be put in the First Division and will now start life in the lowest professional tier in Scotland this season.
However, the loss of one half of the Old Firm in the SPL will mean hugely reduced revenue next season for Scottish football's top clubs.
"This is horrific news for St Mirren Football Club," Gilmour told the Paisley Daily Express.
"The consequences are terrible - catastrophic even. The St Mirren board will meet in the days after the SPL meeting (on Monday) and decide what is the best way forward but we are already looking at major redundancies."
Gilmour was impressed with the document which proposed a merger of the leagues and top-flight promotion play-offs if they accepted the Ibrox club in the second tier.
"It set out changes to Scottish football that would bring in a fairer structure, fairer distribution system, fairer everything," he added.
"Unfortunately, the people in the SFL have not bought into that. I just hope they realise the damage they have done to Scottish football.
"Five clubs in the SPL could be in administration within weeks - and we will have to do everything we can to avoid being one of them."