Rugby Australia has reportedly axed 40 per cent of its staff due as the sport's current economic woes continue.

In continues a turbulent time for the sport in Australia following the Israel Folau saga as well as being hit hard by coronavirus pandemic with former CEO Raelene Castle stepping down in April.

Speaking on ABC's 7.30 tonight, interim Rugby Australia chairman Rob Clarke has cut 77 jobs including 47 full-time staff and 30 freelancers, which is expected to save the sport $5.5 million.

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"I take it very seriously because it's impacting people's lives and family's lives. So, it's something that we must do very responsibly, but I did think it was necessary, and the board supported that," he said to the ABC.

"It's a challenging future right now, as most businesses, and certainly sports, are going through COVID. That said, I think that provides a nice opportunity.

"'Why waste a crisis' is a common phrase, and I think it actually relates to what we have in front of us now."

It comes after professional services firm KPMG signed off on Rugby Australia's books from last year and rugby's five-team Australian competition was confirmed.

Japan's Sunwolves bowed out of Super Rugby on Monday as they failed to join an Australian offshoot of the coronavirus-hit tournament.

The Sunwolves, who are being kicked out of Super Rugby at the end of the season, said Australian officials had told them they won't be able to take part.

The series between Australia's four Super Rugby teams — Queensland Reds, NSW Waratahs, ACT Brumbies and Melbourne Rebels — along with the previously axed Western Force, is set to kick off on July 3.

Super Rugby, which also includes teams from New Zealand, South Africa and Argentina, has been on hold since March.

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"We are announcing that we have been told by the Australian rugby association officially that we are unable to participate in the competition," a Sunwolves statement said.

The decision ends a nearly five-year run in Super Rugby for the Sunwolves, who won only nine games in that time and were on the receiving end of some giant scorelines.

The Tokyo-based side would have had to quarantine for 14 days on arrival in Australia, and they also faced problems in securing a permanent base for 12 weeks.

They said they had consulted with Australia's rugby authorities and government, but "we reached the conclusion that we will not be ready to join matches in Australia from July 3".

"We apologise to people who had been looking forward to the resumption of matches," said Sunwolves CEO Yuji Watase.

"Following this decision, the Sunwolves' time with Super Rugby, which has seen us participate for the past five seasons, will end.

"We are bitterly disappointed to conclude the season in this way, but we also feel honoured to have participated in the best rugby competition."

The Sunwolves, who also played home matches in Singapore and Hong Kong, were introduced in 2016 to bring rugby to new markets.

But southern hemisphere governing body SANZAAR (South Africa, New Zealand, Australia and Argentina Rugby) were reluctant to bankroll the perennial wooden-spooners after Japan's rugby board withdrew financial support.

Clarke said officials had been trying to work through "significant challenges" to field a Sunwolves team in Australia.

"However, the reality is, given the time frame available the team's preparation for the competition would be severely compromised," he said in a statement.

"All parties agree that despite our collective efforts and desire to see the Sunwolves take part in the competition, under the current circumstances their participation will not be feasible." The Sunwolves' exit comes despite the success of last year's Rugby World Cup in Japan and the lure of Japan's well-heeled Top League, which has attracted a series of marquee players from overseas.

New Zealand, like Australia, is also planning a domestic competition, kicking off on June 13, to fill the hole left by Super Rugby's postponement.