Telecom is to move more than 250 contact centre jobs to the Philippines.
The company is already outsourcing some of its call centre roles to Manilla as part of a year-long trial, and released its final plans on Wednesday.
The main cuts will come from its broadband helpdesk, with smaller numbers moving from international roaming and from three wholesale call centres.
Telecom's 123 and *123 contact centre services will remain predominantly based in Hamilton, due to results from a customer satisfaction trial.
Telecom employs 1900 staff in its New Zealand contact centres at the moment, and plans to reduce that to 1610 by 2011.
It plans to increase staff in Manila from 415 to 700.
Telecom retail chief executive Alan Gourdie said the company will work hard to keep redundancies to a minimum by redeploying staff elsewhere or helping them find new roles.
Mr Gourdie said the cost savings will be "in the millions" due to lower wages in the Philippines.
The Engineering, Printing and Manufacturing Union, which represents some call centre workers, says the decision to outsource work to the Philippines is disappointing.
EPMU national secretary Andrew Little says keeping people in jobs will be critical to getting through the recession and it is a pity a large corporation is sending work offshore.
Mr Little says the union will be consulting with affected staff about the Telecom's plans.
However, Telecommunications Users Association chief executive Ernie Newman says he thinks Telecom's plans strike a good balance between keeping the lion's share of jobs in New Zealand and taking advantage of efficiencies offshore.
Mr Newman says falling prices of international phonecalls makes it cheaper for companies to base call centres elsewhere.