About 30 jobs are being cut at Crown forestry institute Scion, the PSA says.
The PSA said the latest plan would affect the equivalent of about 10 percent of the workforce whose main role was to help grow forestry exports.
A PSA spokesperson said it made no sense as forestry was New Zealand's third largest primary export earner.
"This again shows how little the government understands how science is key to our future prosperity and ensuring we can adapt to challenges like climate change," the union's assistant secretary Fleur Fitzsimons said.
It was more "dumb stuff" following on proposed job losses of scientists, researchers and others at Callaghan Innovation and NIWA, she said.
Chief executive Dr Julian Elder said Scion will not be able to retain the number of staff it currently has, because it was expecting to contract for less work next year.
He said about 30 positions were under review, and would be discussed with affected staff over the next few weeks.
Forestry industry concerned as Scion set to cut jobs
New Zealand Farm Forestry Association research spokesperson Angus Gordon told Midday Report it was a sad outcome to an issue which did not need to be inevitable.
"We want to have a knowledge-based, first world, bio-based economy with high productivity, but our investment decisions, especially those of central government on behalf of all New Zealanders, seems to be saying otherwise," he said.
"This is just another cut to an already underfunded and undervalued knowledge sector, in my opinion."
Scion's headquarters are in Rotorua.
In an explanation of its work on its website, Scion says it undertakes science, research and innovation in forestry and works with industry, government and iwi to help achieve "positive environmental, social and economic outcomes for New Zealand".
Among projects it is involved in are the One Billion Trees initiative and the drive to establish a biofuel industry in New Zealand within the next few years.
Job losses show reality of science funding, academic says
A forestry academic is slamming the proposed job losses at Scion as short-sighted, saying it highlighted poor science funding in New Zealand.
Canterbury University school of forestry Professor Euan Mason said the losses would lower Scion's reputation and affect its ability to retain quality staff.
"A scientist's role is very specific and it's very highly skilled. And when you do this to people, you're in some cases, particularly people who are maybe middle-aged or older, you're destroying their careers," Prof Mason said.
"And nobody wants to hang around in a job with an organisation that might do that to them."
He believed the whole science funding model had been wrong since the 1980s.
An overhaul was long over due if New Zealand was going to retain high quality research, he said.
"We need to be more cooperative with jobs. It should be difficult to obtain, but once you obtain your job as a scientist, then it should be relatively secure and you shouldn't have to spend half your time running around after money for fear of losing your job."
Prof Mason lost his job at the Forest Research Institute (now Scion) in 1989, only to have the organisation try to "re-hire him" four years later as he carved out a successful international academic career.
"Luckily, I was young enough at the time to salvage my career, so I'm now a full professor and I've had an international impact. So I have a reputation throughout the world in my sort of narrow field."
This showed how short-term and myopic many decisions were, he said.
"They literally destroy careers for some people and it's just not fair. We need to change the way we work."