The Public Service Association says a restructure at Te Puni Kokiri has come as a big shock for staff.
From today, the Ministry of Maori Development is cutting many roles while creating new advisory ones in a shake-up at the agency.
The union's acting national secretary, Glenn Barclay, said it was concerned that Te Puni Kokiri had been operating under an increasingly tight budget and the squeeze would stifle its ability to perform effectively.
Mr Barclay said even though staff knew some of them could lose their jobs, it has been deeply shocking for them.
He said before the restructure there were 366 positions and about 80 are now expected to go.
Mr Barclay said there are people who have been employed on limited term contracts because the department could not commit to keeping those positions going and that has been destabilising for them as well.
New structure to take effect from November
The ministry on Friday announced the second phase in a restructure of the organisation, including a shift from administering large funding contracts to a more advisory role to ministers and the state sector.
In 2013, Te Puni Kokiri told the Maori Affairs Select Committee that it had been holding off from filling 56 jobs until a review had been done that was completed later that year.
Te Puni Kokiri chief executive Michelle Hippolite said last week that the agency would go through a recruitment and reassignment process from Monday, with job opportunities given to existing staff first.
Michelle Hippolite said who was left and who would be going would not be known until about six to eight weeks from now.
Ms Hippolite said the restructure was part of a strategy to increase the organisation's permanent staff and reduce the amount of outsourcing that has been required.
Independent MP Brendan Horan in December last year accused Te Puni Kokiri of blowing its budget on contractors and consultants, including paying PricewaterhouseCoopers more than $800,000 to split over 11 contracts.
The new structure is to take effect from 3 November.