The Telecommunications Users Association says a culture of extravagance has developed at Telecom and job cuts were inevitable.
Telecom confirmed on Thursday it plans to axe up to 1230 jobs in an attempt to cut costs and remain competitive.
It said the number of fulltime staff would fall from about 7500 to between 6300 and 6600.
Paul Brislen, the association's chief executive, said former Telecom boss Paul Reynolds created a culture of extravagance and would fly in consultants from around the world on million dollar salaries.
"He hired Paul Hamburger who lived in Florida, who would fly in and out. We saw a legal counsel from the UK appointed. (There was) a willingness to fly people around the world, simply to work on an occasional basis."
Mr Brislen said the number of people earning $100,000 salaries at Telecom exceeds the total number of staff at Vodafone.
He said Telecom is about the same size its rival, but has about 4500 extra employees.
Mr Brislen believed wages could have been reduced by $100 million at Telecom and the industry has known for a year that job cuts were needed.