The Zurich-based company indicated earlier this week job cuts were coming "in light of current macroeconomic uncertainty, shifting policy priorities where climate tech is seeing reduced momentum in some areas" and lack of clarity for its next plant in the United States.
US President Donald Trump's administration has moved to gut US government environmental and climate activities and roll back pollution regulations.
Climeworks did not say how many jobs would be cut but state broadcaster RTS said on Friday that consultations with staff were under way.
It noted the procedure is required when Swiss companies want to cut more than 10 percent of their staff.
Climeworks employs nearly 500 people.
The company said: "We find ourselves navigating a challenging time" and "we need to be mindful that our funding must be managed with diligence."
It has been operating a facility in Iceland for several years that uses huge industrial fans to suck CO2 from the air and bury it underground. It hopes to launch construction next year of a larger facility in the US state of Louisiana with the aim of drastically reducing the cost of capturing carbon.
There have long been concerns about whether carbon capture and sequestration (CCS) technology will prove effective and affordable but it has also spurred controversy over whether it should be part of plans to reduce greenhouse gas emissions and limit global warming.
The fossil fuel industry has long looked at CCS as a technology that would allow use of oil and gas for longer.
The Icelandic magazine Heimildin said in an article published on Thursday that the Climeworks facility there is not capturing enough CO2 to offset its own operations.
Contacted by AFP, the company said its second-generation unit is still not fully constructed and has not reached its full planned carbon capture capacity.
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