New Zealand’s public job cuts cast more gloom in recession-hit economy

When communication specialist Katie Howe moved to Wellington from Canberra two years ago, she was excited by the prospect of expanding her business in a new market.

The slashing frenzy reached a fever pitch in recent weeks, so much so that the local media has started keeping a running tally of job cuts – now about 2,000 across various ministries, with more to come.

These moves have put workers on edge and added more pressure to falling job vacancies. While a cooler job market could arguably slow down inflation, it is rattling an already jittery economy, experts say. New Zealand entered a technical recession in the final quarter of last year.

Howe does not work in the public sector, but still says the job cuts are sending ripples through private industry.

“After Covid, one recession, two recessions, another graduating year of students entering the employment market, after a government contracting freeze last September, it’s just too many compacted issues all at once,” she said.

New Zealand’s Finance Minister Nicola Willis, who is overseeing the cuts, has said that workers will find other jobs.

“But there are no jobs,” Howe said. “Everyone applying is overqualified and if they get the role they’re taking 20 per cent salary cuts. For your average middle manager, that’s about NZ$20,000 (US$12,100) less per annum.”

According to a March update by online job search platform Seek, job vacancies in New Zealand have fallen nearly 30 per cent in the past year. The drop in vacancies was the highest for Wellington at nearly 40 per cent.

In February, Seek New Zealand’s Country Manager Rob Clark said the confirmation of a recession had dampened hiring interests, adding that conditions could still worsen.

The unemployment rate is, however, still