The company that provides the School Journal to primary schools is under financial pressure to compete with other businesses.
Learning Media has been publishing the journal for the Ministry of Education for 20 years.
Chairperson Sandy Maier told a Parliamentary select committee on Wednesday that the Government's focus on a cost-efficient public sector is affecting its business.
Mr Maier said Learning Media now has to compete for ministry contracts against small businesses and not-for-profit organisations.
He said morale at the company is low because of constant restructuring and redundancies.
Learning Media has paid more than $750,000 for redundancy over the past four years.