The Engineering, Printing and Manufacturing Union says Government pressure on New Zealand Post to return a profit should be eased.
Yesterday, the State Owned Enterprise announced 400 redundancies as part of its five-year plan to adapt to the decline in letter volumes.
Standard mail will only be delivered every second day progressively from July, for cities and towns.
An EPMU organiser Joe Gallagher said the Government should not place such a high demand on the company, so it can grow.
"They Government could use that money they're potentially going to throw at SkyCity, perhaps they could give that to New Zealand Post to grow Kiwibank."
However, New Zealand Post said the Government's requirement to return a profit was not connected with the redundancies.
Mail and communications chief operating officer Ashley Smout said the Government had no involvement in company's operations, but it was interested in the outcomes.
"The Government has expectations that all of its state owned enterprises will make an acceptable return, from New Zealand Post's perspective we've got a lot of work to do to reach that point."
Mr Smout said New Zealand Post was still a relevant company for the Government to invest in.
Meanwhile, the company has rejected an EPMU claim it is moving towards having contractors rather than employees deliver mail.
The union believes that if a pilot scheme using contractors due to start in New Plymouth in May is successful, there is a possibility all postie positions could be contracted out.
But Mr Smout said New Zealand Post was still working out the most flexible delivery model.
"The mix is changing, mail is declining with the internet and parcels are increasing with the increase in online shopping.
"We've got these twin dynamics to work through, but we have no preconceived idea of employee versus contractor model."