The Australia-based engineering company employs 1400 staff on telecommunications work in New Zealand, 90 percent of which is for Telecom.
Transfield said it was losing a substantial amount of money on the five-year Telecom contract which ends in January 2009. "We've been pleading with Telecom for some financial assistance and that hasn't been forthcoming," Ross Lockwood, general manager of Transfield's telecommunications business, said.
"We are saying we face huge losses between now and January so we have to stem those losses." The EPMU said Transfield is considering exiting the telecommunications sector altogether over the breakdown with Telecom in negotiations to renew their contract.
Such a move that would see 1400 redundancies and half of Telecom's work shift elsewhere. The redundancies announced on Thursday by Transfield may be the beginning of a destabilising shift in the telecommunications landscape, said the EPMU.
EPMU national industry organiser Joe Gallagher said Transfield was one of the two biggest players in the telecommunications engineering sector. If the company walked away from their Telecom contract it would mean uncertainty for union members and for the industry in New Zealand, he said.
"There are a lot of promises being made at the moment about new investment in our telecommunications networks and although welcome, they will amount to nothing if the workforce in the industry is not properly supported and developed.
"Our members are facing a lot of uncertainty and it makes their voting at the moment on a collective agreement offer from Transfield much trickier because they only found out about the possibility of redundancies after the nationwide vote began," he said.
There was a risk that the skills needed to develop the broadband network would be lost. "Already we've had reports of members talking about going to Australia if their jobs with Transfield are lost," he said. The company said it was proposing making 170 positions redundant to give enough savings until the end of the contract date and there would be a period of consultation with staff.
"We are making the cost cuts now. We are forever hopeful of a new contract but we are losing money and that is why we are making these cuts," Lockwood said. He said Transfield could not continue beyond the contract date on the same terms because the loss.
Staff were given the news at meetings in Wellington, Auckland, Christchurch, Hamilton and New Plymouth.
