A union representing postal workers doubts many of the 500 people set to lose their jobs will relocate to other regions. New Zealand Post is halving its processing centres due to a major decline in mail service use.
The company announced on Wednesday it would close its Wellington, Hamilton and Dunedin centres and expand ones at Auckland, Palmerston North and Christchurch.
About 500 full-time and part-time jobs are set go at the big processing centres - 163 in Wellington, 129 in Hamilton and 73 in Dunedin - and at smaller mail sorting centres in 20 towns including Dargaville, Rotorua, Hawera, Gisborne, Gore and Blenheim.
New Zealand Post will create 380 new jobs, but those are limited to the Auckland, Christchurch and Palmerston North centres.
Engineering, Printing & Manufacturing Union spokesperson Joe Gallagher predicts that just 5% of people will choose to move to other regions due to a lack of housing in earthquake-hit Christchurch and high rent and house prices in Auckland.
"Couple into that these people in some cases have worked for 10, 20, 30 and 40 years for New Zealand Post and have become part of the communities they're in - that's a huge ask to ask them rip all of that up and move."
Susan Banks-Ngariki, a mail officer at the Te Puni Mail Centre at Petone near Wellington, says it was a tough morning for her colleagues when the announcement was made at 9am.
"There was shock and there was sadness - some people were very upset, some people were crying. It impacts on us as post employees but (also) our families and then in our wider communities."
New Zealand Post expects to save up to $30 million in the move over the next 18 months.
Chief executive Brian Roche said on Wednesday that mail volumes are declining at 8% a year and are expected to continue to decline. The number of items of mail processed has fallen by nearly 200 million in the past decade.
Mr Roche said processing mail at fewer centres would cut New Zealand Post's overheads, especially the costs of leasing and operating major facilities in multiple locations.
He said the retail network also faces a shake-up in the next 12 to 15 months and there will be further job losses in the delivery business.
The last major change to the processing network was a decade ago, when mail centres were reduced from 26 to six and further changes can't be ruled out, Mr Roche said.
The announcement takes the total number of job losses at New Zealand Post in the past week to 220 after it said on 20 June that 100 corporate jobs would be cut in Wellington and Auckland.
New Zealand Post's full-year profit after tax nearly doubled in 2012, but postal revenues fell by $17 million.