WorkSafe has confirmed it is looking at cutting between 100 and 120 jobs, but promises front line inspector numbers will rise.
This comes at the same time as the agency has announced chief executive Phil Parkes is stepping down.
The lead public sector union said the restructuring proposal would result in a "significant loss of technical expertise" when work fatality rates remained too high.
WorkSafe said it was consulting staff about its proposal.
RNZ reported in August the axe was coming down, and vacancies were not being filled, and reported yesterday that the overhaul was expected to be announced today.
"The proposed changes would still result in WorkSafe having more staff than we did prior to Covid 19," the agency said online today.
"We have worked hard to prioritise non-personnel cost reductions over changes that directly impact our people."
Public Service Association national health and safety leader Jeff Sissons called it "devastating".
"It's a big hole - 120 jobs - it's a really devastating blow to our members because they do really important work."
WorkSafe said any inspector not currently in a frontline role would be offered a job on the frontline.
"This reflects our commitment to streamline our activities to our core functions."
The Business Leaders' Health and Safety Forum said the agency was not failing, but needed to get back to its core work and put "heat" on businesses that did not measure up.
Parkes has been at the helm of the beleaguered agency for three years, and stays till the end of 2023.
"It's been a privilege to have worked with such a dedicated team who are committed to reduce work-related harm across Aotearoa," he said in a statement.
Work-related fatalities had dropped since 2013, he said.
However, drops have recently largely stalled, and both the PSA and business forum said that fatality rates well ahead of those in the likes of Australia and the UK were not acceptable.
WorkSafe board chair Jennifer Kerr said Parkes had been "a strong voice for the need to collectively prioritise health and safety".
"Phil has been with WorkSafe for almost nine years and believes the time is right for his next chapter, and for new leadership and thinking for the organisation."
The agency has faced widespread criticism over its investigations, with its problems compounded recently by the dismissal of several charges in its landmark Whakaari / White Island prosecutions.
Its statement today does not spell out its financial position - its deficit is understood to have ballooned, partly due to doubling in spending on consultants and contractors in 2022 - but said it had recently got extra government funding for victim and coronial services, and the Whakaari litigation.
The PSA urged the government to fund it to the "right level".
The proposal to cut jobs comes at a time when the government has called for big savings across the public sector, and during an election campaign featuring calls to cut core public sector costs, aside from education and health.