More than 300 Defence Force staff have been told they are losing their jobs.
The 308 redundancies announced on Wednesday morning are the first phase of a plan to cut military personnel in an attempt to save about $23 million.
Staff have known for months about the changes, which involves cutting about 1000 uniform jobs and replacing them with some 500 civilian staff.
The assistant chief of personnel, Commodore Kevin Keat, says a lot of the staff made redundant will be strong contenders for the new civilian positions.
But Commodore Keat says it would be illegal for the force to ring-fence the positions for former staff.
A second round of redundancies will be made in mid-2012 and the Defence Force says there may be more after that.
The force says civilians cost an average of $20,000 less per year.
The cuts on Wednesday include 81 officers and 227 other ranks. The hardest hit is the Army, which will lose 155 positions, followed by the Air Force (82 jobs) and the Navy (71 positions).
The positions cut do not require military training and include drivers, instructors, photographers, logistics and administrative personnel.
The Defence Force will advertise 324 civilian positions now held by 512 uniformed staff on Thursday.
It encourages staff being made redundant to apply for the new civilian jobs, but says they will not be given priority.
http://www.radionz.co.nz/national/programmes/checkpoint/audio/2492445/308-military-staff-lose-their-jobs.asx Listen to Commodore Kevin Keat on Checkpoint
Cuts are 'very realistic'
The former Chief of the Army Lou Gardiner, says the redundancies are the only way to balance increasing costs in the military.
Mr Gardiner, says the cost of equipment and vehicles, especially in the airforce is on the rise.
"Those sort of increases in operating costs have to come from somewhere. So, Defence is making some very realistic and needed reforms to create that fund," he said.
However, the Labour Party's defence spokesperson, Iain Lees-Galloway, says by waiting another year to announce further redundancies the Government is hurting morale.
Mr Lees-Galloway wouldn't say whether Labour would increase military spending if it was in power.
Returned and Services Association national president Don McIvor says he does not want the capability of the armed forces to be compromised.
Mr McIvor says while the Government and Defence Force say that will not happen, the RSA will be watching closely.