Gen-i, the information-technology arm of Telecom, is scaling back its operations in Australia and will axe around 120 jobs across the Tasman.
Telecom said it had reviewed Gen-i's operations in Australia and as a result will strip back its activities.
It will now focus on meeting the information and communications technology needs of large Trans-Tasman corporate customers.
As a result of this, staff numbers will fall from 180 to 60, Telecom said in a statement to the NZX.
Gen-i's new chief executive Tim Miles launched the review after joining the company last month and said an assessment of the New Zealand operations was also underway.