It comes after an all-staff meeting on Wednesday, where staff were told of a new "organisation design" proposal and invited to consult on it.
It is part of the council’s $4.5million transformation programme, which will change how the council works internally and interacts with the public.
The council has about 250 staff in full-time, part-time, casual and volunteer roles.
Chief executive Alex Parmley said under the new proposal, which was "not a traditional restructure", some of those roles would be removed.
"I’ll be absolutely clear, and I have said this to staff, over the next couple of years we will become a slimmer organisation."
The organisation would transition to its new model by keeping some positions vacant and filling some with temporary staff.
Just as some roles would be removed, new ones would be created.
When asked if the council would make any staff redundant, Mr Parmley said he could not answer that.
"As a good employer we need to go through a consultation process with our staff."
It was a "genuine consultation" and he would not confirm specifics, such as how many fewer roles there would be, until staff had had their say.
The consultation would conclude on June 6.
"Every department, every staff member is affected by our proposal."
When asked if the council was willing to make redundancies, he said it was a last resort.
"I can’t make a commitment there won’t be any redundancies.
"We don’t want to make people redundant. We’ve tried to set up a process that gives everyone an opportunity within the new organisation."
The decision to hire contractors and not fill positions was made with the idea of minimising redundancies in mind.
The council had the right number of staff to deliver its services under its current model, Mr Parmley said.
When the council became more efficient, which was the aim of transformation, then it would need fewer staff.
There was a lot of interest in the transformation, but "probably not a lot of understanding" from the public, Mr Parmley said.
"I understand the frustration of the community.
"We’re looking at how can we modernise what we do, to make it fit better with our customers’ needs."
Things were changing on a fundamental level and layers of bureaucracy would be cut out so staff could achieve better outcomes.
"This council was set up in 1989 ... It hasn’t changed that much since then. The world we operate in has changed quite a bit. "
If somebody wanted to open a restaurant in a council building in the centre of Oamaru they would probably need to engage with five different departments, he said.
Those departments did not work efficiently together and it was like they were treated as five different customers.
The aim was to have them work together so that person would be treated as one customer and their restaurant could be set up more efficiently.
