Fletcher Building is looking at slashing about 1000 jobs in New Zealand as it moves to reduce staffing by 10 percent.
The company said the Covid-19 crisis was likely to have a significant impact on its business both in New Zealand and Australia.
Chief executive Ross Taylor said the news would be hard to hear for staff and it was an unsettling time for all.
However, he said it was imperative that the company was positioned for the expected market downturn, which meant tough calls had to be made.
"Like any business facing much lower revenue ahead, we need to reduce our spending to prepare for these tough times.
"Our first goal has been to implement cost-saving measures that would allow us to retain as many of our people as possible. These include looking hard at our operational footprint, exiting some offices to make better use of the space we have in places like the Group's Penrose headquarters, making improvements to the efficiency of our supply chains so that we need fewer warehouses and depots, and ceasing some unprofitable product lines."
He also said spending on marketing and travel, as well as bonuses would be reduced, and 30 percent salary cuts for Board and chief executive pay would remain until the end of September.
The Group was also looking to reduce its Australian workforce by 500.
"Moving ahead as proposed would mean losing talented and hard-working people from Fletcher Building. Any of our people affected will have made a difference to our company, their teammates and our customers - these decisions are not a reflection of their value or contribution."
In New Zealand more than 400 operating sites were closed during the level 4 lockdown and the Group's New Zealand businesses are currently trading at 80 percent of forecast May revenues.
Taylor said while the government's commitment to back infrastructure projects was good news, growth would take time to ramp up.
"We expect Covid-19 will lead to a sharp downturn in 2021 [financial year] and potentially beyond. Looking to the next financial year, we are planning for an environment that will see a shrinking economy, substantially reduced customer demand across all our businesses and sustained lower levels of productivity."
He said staff would be retained under the obligations of the wage subsidy scheme, for which the company got $67.6 million, and that staff would be paid their full redundancy entitlements.
Consultation with staff and unions would begin this week.