More than 300 jobs will be slashed at the Ministry of Foreign Affairs and Trade (MFAT) as part of cost cutting.
The ministry informed staff today of its proposal to cut 305 jobs.
Foreign Affairs Minister Murray McCully says the ministry needs to make changes to adjust to the country's needs, following dramatic changes to the markets New Zealand sells to in recent years.
"The consultation document... is a constructive attempt to develop a ministry that can serve New Zealand's interests in a changing world," Mr McCully says.
He says it is critical the ministry maintains its talent base, and that it carries out open and genuine consultation with staff.
The Government's priorities will be taken into account in the final decisions, he says.
Labour's foreign affairs spokesman Phil Goff says the proposed job cuts represent a quarter of the ministry's employees, and are the direct result of the Government's demand that MFAT make savings of $40 million from its $400m a year budget.
"However they dress it up, this is a gutting of core ministry staff," he said.
"It will hugely damage the capacity and performance of a ministry that has a reputation for competency, effectiveness and commitment."
He earlier told NZ Newswire every staff member except heads of mission would have to reapply for their jobs, and consular work could be contracted out, meaning private companies will be looking after Kiwis who become ill overseas.
Mr Goff says the cuts will undermine MFAT's ability to carry out its basic functions.
New Zealand First leader Winston Peters says the cuts are a step backwards for New Zealand as it attempts to boost international trade links.
"Countries like Singapore, Brazil and Norway, which are doing very well, are increasing their overseas posts," he says.
NZN