Goldmining company Newmont Waihi Gold is planning to cut jobs at its Waihi mines and scale back its exploration programme.
Up to 20 staff and contractors could be affected across three sites employing about 350 people.
The company is starting to consult workers and the exact number of positions that will be lost will not be known until 2 October.
Newmont Waihi Gold says it has been significantly affected by costs rising faster than gold prices over the last five years and cost cutting needs to start now in order to keep the mine viable.
The company says it wants to offer job changes rather than redundancies where possible and a number of staff are being offered work at other Newmont sites.
It is also likely there will be significant scaling back of the company's exploration programme.
Newmont Waihi Gold's external affairs manager Sefton Darby says the company is experiencing rapidly declining profitability, which is squeezing the company as a whole.
He says the primary issue is labour costs, but the rising price of materials such as steel and cement is also hitting the company.
"The price of gold certainly has helped, but it only helps if it keeps pace with the increase in costs," he says.
Mr Darby says taking into account currency movements, the price of gold in New Zealand dollars has gone up by about 60% since 2008 while costs have gone up 80% in the same time.
He told Radio New Zealand's Checkpoint programme the company only just made a profit last year, and won't this year.
The company says the cuts are part of a wider package of job cuts across Newmont sites globally, in Australia and the United States. Staff at Newmont's four mines and regional headquarters in Australia have also been notified this week of likely redundancies.