Timber industry representatives say every mill in the country is having to cut staff hours or jobs to cope with a sharp drop in demand for domestic and exported timber.
On Friday, the Blue Mountain Lumber Mill near Tapanui made 56 workers redundant.
Wood Processors Association chief executive Peter Bodeker, says all mills are having to scale back costs to survive as demand for timber and the number of housing consents drops.
He says further jobs cuts are inevitable because the industry is still dependent on producing framing for new houses at time when few are being built.
The Timber Industry Federation says few mills are making any money as they push out greater volumes at low prices to keep cash coming in.
Timber mill job losses a blow, says mayor
The loss of 56 jobs from the Blue Mountain Lumber Mill is a blow to the community, says Gore District Mayor Tracy Hicks.
The workers at the mill near Tapanui were handed their redundancy notices on Friday morning after they were told on Tuesday of restructuring plans.
Mill owner Winstone Pulp International says the cuts had to be made to keep the mill viable because of a drop in demand for framing timber.
Forty-eight workers will remain at the mill.
Ms Hicks says the job losses have not come as a complete surprise but will nevertheless gave an impact on the community.
The company's managing director, Dave Anderson, says 12 people volunteered for redundancy after Tuesday's meeting.
Other employees were told whether their jobs would go as they arrived at the mill from 8am on Friday.