"Redundancies take money out of the local economy. The loss of almost 200 Corrections roles doesn't just affect those who are losing their jobs, but their communities as well."
Mr Davis questioned a move to increase the number of prison beds while reducing staff numbers to look after those beds.
"Interestingly Mr Smith says Corrections is looking to improve education, employment, reintegration, health and rehabilitation services for prisoners and reduce re-offending by 25 per cent by 2017. He is also talking increased prison bed numbers.
"With fewer people to actually provide the services, and potentially 433 more prisoners, it will be interesting to watch the 'reshape'," he said.
"Meanwhile we can expect more families to uproot themselves from regions that need more workers, not less."
Mr Smith said corrections hoped to find new positions for staff affected by the cut.
"I'm aware of the stress they may now face, but I'm committed to providing strong support to enable affected staff to move into other positions in Corrections around the country."
The restructure will take place over the next year.
Corrections Minister Peseta Sam Lotu-Iiga said the units were to be shut down as they were unfit for purpose.
"These units are dilapidated and would need a significant amount of money spent on them to bring them up to standard," he said.
"We believe that money is better spent on upgrading units in growing population areas so prisoners have a better chance of rehabilitation, through modern new facilities where they can get an education and gain industry skills."
Mr Lotu-Iiga said the new structure would allow staff and resources to be focused on getting prisoners upskilled enabling them to find employment after they are released.
"I'm assured that all staff will be supported through this change and I'm confident it will improve productivity and performance," he said.
The Department of Corrections plans to spend $140 million upgrading prison facilities in eight locations including Invercargill, Wanganui, Hawkes Bay, New Plymouth, Tongariro/Rangipo, Auckland, Spring Hill and Northland over the next year.