Auckland-based marine electronics manufacturer Navico is laying off 40 staff from its Northcote factory.
John Scott, Navico Asia Pacific's chief operating officer, and Renee Mead, director of corporate communications, said the company had entered harder times.
Scott said rising petrol prices and falling house prices had meant theprojections for international sales were suffering.
Problems in the United States economy were at the heart of the issue, he said.
Navico would reduce capacity through a reduction in its staff numbers, a process which started with the announcement of layoffs at the Northcote factory yesterday, he said.
"The move will affect 40 employees from Navico's manufacturing workforce who will be involved in a one-week consultation process before a final decision is made," the joint statement from Scott and Mead said.
In May, Navico announced that it had chosen Auckland as its international hub for research and development. The company, headquartered in Oslo's Lysaker, made the North Shore division of its international business its largest innovation branch, going on a global recruiting drive to employ 50 more staff in manufacturing and support in the past year.
But yesterday, Jens-Thomas Pietralla, Navico president and chief executive, was less upbeat and said he was sorry about the cuts.
"These actions are regrettable because they impact Navico people whose performance has been very good but they are necessary in light of the accelerated decline in the global marine electronics market."
