Transfield says it has reached an agreement with Telecom that means it can sustain its business without laying-off staff.
The telecommunications contractor has cancelled its planned 170 staff cuts.
Transfield said last month it had no choice but to cut costs and staff as it faced uncertainty about its contract with Telecom, which is under negotiation for renewal.
Employees picketed outside Telecom's annual meeting in Wellington last week.
General manager Ross Lockwood says the company reached a preliminary agreement with Telecom on Friday and no one will be made redundant.
He says the planned lay-offs were a last resort measure the company had been forced to take due to rising costs.
He says Transfield and Telecom are working on the details of renewing the contract which ends in January.
