Telecommunications contractor Transfield says the 170 staff it planned to lay off will now keep their jobs.
The company says it has reached an agreement with Telecom that gives it more confidence about its future.
Transfield said last month that it had no choice but to cut costs and staff as it faced uncertainty about its contract with Telecom, which it was in negotiations to renew.
Its staff picketed outside Telecom's annual meeting in Wellington last week.
Transfield Services general manager of telecommunications Ross Lockwood says the company has reached an agreement with Telecom that will ensure its contractors can keep their jobs.
Mr Lockwood says Transfield and Telecom will work on the finer detail of a renewed contract during the next few weeks.