Telecom is slashing about 120 Gen-i Australia jobs as it starts to implement the new strategy announced at its half-year result release last month.
About 60 of the original 180 jobs will remain.
Gen-i chief executive officer Tim Miles said Gen-i Australia was set up about 13 years go to serve the transtasman needs of existing corporate customers.
Over the years, it broadened its activities within the Australian information and communications technology (ICT) services market.
''But we have never had the scale to compete effectively in these other market segments. We believe the time is right to return to Gen-i Australia's core purpose and renew our focus on transtasman ICT services.''
Where feasible, Gen-i Australia would transfer some customer activities across to AAPT, a wholly owned Telecom subsidiary and Australia's largest business-only telecommunications provider, Mr Miles said.
''The transtasman market has good growth potential as the New Zealand and Australian economies grow closer together, facilitated by improved data connectivity.''
About 40% of New Zealand's international internet traffic was between Australia and New Zealand, versus 10% in 2000.
The trend was set to continue, he said.
As previously announced, the Telecom group expected to recognise a material one-off change in the second half of the current financial year as it implemented a strategic shift in direction.
Costs associated with Gen-i Australia would be included in the charge which was excluded from the group's stated guidance of adjusted operating profit in the range of $1.04 billion to $1.06 billion.
Mr Miles said Gen-i had about 2400 staff.
