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Redundancies announced at key Telecom contractor, Transfield, may be the beginning of a destabilising shift in the telecommunications landscape says the Engineering, Printing and Manufacturing Union in New Zealand (EPMU).

The 170 redundancies focus mainly on Transfield's central and lower North Island operations and come at a time the company is considering exiting the telecommunications sector altogether over a breakdown with Telecom in negotiations to renew their contract - a move that would see 1400 redundancies and half of Telecom's work shift elsewhere.

EPMU national industry organiser Joe Gallagher says the redundancies bode badly for workers and the sector.

"Transfield is one of the two biggest players in the telecommunications engineering sector and if they walk away from their Telecom contract it will mean uncertainty for our members and for the industry in New Zealand.

"There are a lot of promises being made at the moment about new investment in our telecommunications networks and although welcome, they will amount to nothing if the workforce in the industry is not properly supported and developed.

"Our members are facing a lot of uncertainty and it makes their voting at the moment on a collective agreement offer from Transfield much trickier because they only found out about the possibility of redundancies after the nationwide vote began.

"If Transfield is forced to shut down their telco division our members risk being left high and dry and New Zealand risks losing the very skills it desperately needs to bring the broadband network up to scratch.

"Already we've had reports of members talking about going to Australia if their jobs with Transfield are lost.

"Right now we're looking at the best answer for our membership, but while disagreement between Transfield and Telecom destabilises the whole industry the options are narrowing."

The EPMU represents 50,000 New Zealand workers across 11 industries including more than 6,000 in the Telecommunications and Electrical industry.