Thirty-nine Gough Group employees working at Macraes gold mine are to be laid off next Friday and more job losses may be in the pipeline at other contracting firms around the region as a result of cost-cutting measures at Oceana Gold.
Gough staff were informed of the cuts during a meeting at Macraes Flat, at the same time as Oceana Gold staff in Palmerston, on Tuesday afternoon.
However, many of the other major contractors at Macraes were surprised and left reeling after learning on Tuesday night of Oceana Gold's staff cuts.
In one case, a business learned of the cuts in yesterday's Otago Daily Times.
Gough Group chief executive Karl Smith told the Otago Daily Times 39 on-site mechanics who serviced mining vehicles at Macraes would be laid off at the end of next week.
While the job cuts were upsetting, he believed there was a silver lining in the announcement.
``I think the reality for anyone involved in [gold] mining around the planet is the drop in gold prices is having a major impact.
``The upside is, we will do everything in our power to relocate our staff. I guess if there's any silver linings in this situation, this is it.''
Mr Smith said the group had about 50 open positions around its New Zealand network, and hoped to fill the positions with employees from Macraes.
``We'll move people if they are willing to go, and pay for their removal costs.
``That's our major focus at the moment.''
He believed some of the staff may also be picked up by Oceana Gold.
Gough Group has been working closely with Oceana Gold at Macraes since 2002 when it signed a $180 million contract with Goughs to supply Caterpillar equipment, parts and services.
The order was the largest single order placed with Goughs.
The job cuts at Goughs came as a direct result of an announcement by Oceana Gold on Tuesday that it would be cutting its open pit workforce by more than 100 staff over the next two years.
Oceana Gold managing director and chief executive officer Mick Wilkes said the prolonged and sustained drop in the gold price had forced the company to reduce costs in order to sustain its operations.
A new mine plan has been drawn up, reducing the amount of material movement and gold production at the open pit, which means lower equipment usage and a reduction in operating costs and support staff requirements over the next two years.
A smaller cutback is also planned at the Frasers 6 open pit, which will begin in the second half of this year, he said.
Amalgamated Workers Union New Zealand secretary Calvin Fisher said he believed at least half a dozen major companies were still to inform employees of impacts to their operations as a result of Oceana Gold's announcement.
SGS New Zealand business manager Hugh McMillan said the laboratory testing company was surprised to learn of Oceana Gold's announcement on Tuesday night, and management was still investigating what impact it would have on the business.
SGS had 30 staff at Macraes providing a range of services covering on-site laboratories, water treatment, in-plant operational support, process consulting, debottlenecking, equipment optimisation and expert systems.
A Joyce's Contracting spokeswoman said the machinery hire company was in a similar situation after learning of Oceana Gold's announcement by reading yesterday's Otago Daily Times.
She said Joyce's employed about a dozen staff at Macraes.
Oceana Gold senior financial analyst Nova Young said the ``re-optimised'' Macraes mine plan could affect about 25% of the company's 560 present workforce which included contractors.
Following consultation, a final decision regarding the number of jobs affected would be made later this month.
She said the company would continue to consult employees at Macraes and other relevant third parties and discuss alternative employment arrangements with employees directly affected.
The idea of re-hiring staff, if gold prices increased again, was not discounted.
``We regularly review our mine plans which are also dependent upon the gold price and will make any necessary adjustments accordingly in order to sustain operations.''