Hundreds more jobs are proposed to go at Health New Zealand, the PSA union says, and affected staff say they feel despondent, exhausted and anxious.
Health NZ confirmed it was consulting with staff on proposed changes to its people and culture team. RNZ understands it has also proposed restructuring its communications department.
The Public Service Association said Health NZ proposed cutting 338 roles in the people and culture team from 1632 to 1294.
RNZ has approached Health NZ for comment and asked it to confirm those numbers.
The people and culture team services more than 80,000 staff.
A number of Health NZ employees, whom RNZ has agreed not to name, detailed a gloomy mood and worries about having to do more with less.
One staffer said the team was "shell shocked".
"We just don't know how head office plans to actually support the front lines," they said.
Another said staff were feeling "very despondent, exhausted, burnt-out and disengaged".
They said the team had "serious incidents and emerging risks coming out of our ears", but it was losing resources to deal with them.
A third employee said people were "incredibly anxious, frustrated and somewhat despondent."
"Many of the people affected have already been through a number of restructures in the last two years.
"For many teams and roles, the workload was already unsustainable, so it is concerning to see that there is a move to a 'more to less' structure."
Information shared with staff and seen by RNZ said the communications and engagement (C&E) team's budget was mostly made up of staff costs, and it had to save $3.1 million.
"Based on an initial assessment we don't consider it possible to achieve the required cost savings without reducing the number and structure of our teams and the number of staff in C&E," it said.
It proposed making roles more "generalist", and doing more work in-house rather than outsourcing things like graphic design and videography.
But Health NZ was open to staff feedback and ideas, and no decisions had been made, it said.
Union considering legal action
In a statement about the people and culture restructure proposal, PSA national secretary Fleur Fitzsimons said the union was considering a legal challenge.
The team's work was vital to ensure there were enough health workers and that they were supported, safe and properly paid, she said.
"These cuts are just another way the government's unfocussed reckless drive for savings will impact the healthcare New Zealanders receive.
"The PSA is seeking legal advice as to whether it would also challenge this change proposal in the Employment Relations Authority."
Proposed restructures in four other Health NZ departments were already the subject of a PSA legal challenge.
Those plans were due to be scrutinised by the Employment Relations Authority at hearings on April 22 and 23, unless Health NZ and the PSA came to an agreement beforehand.
Cuts to help manage billion-dollar deficit
At the end of last year, Health NZ's expected deficit for 2024-25 was $1.1 billion, and change was needed to "live within budget", then-chief executive Margie Apa said.
An independent financial review by Deloitte released last month found the agency had lost control of spending.
It talked about "missing" plans, unheeded warnings and that "there was never buy-in" from operational teams to make savings even as financial troubles loomed.
But it also said some factors in the budget blowout were outside the agency's control - including the 30% rise of nurses' wages over three years.
The same day the report was released, Health Minister Simeon Brown announced a major overhaul of the health system including reinstating a board and "partnering" with the private sector.
Health NZ's productivity was declining despite growth in the workforce and core operating funding almost doubling between 2014 and 2024, he said.
Fitzsimons said the fact Health NZ was cutting jobs to save money showed the system needed "much greater funding".
