The Department of Corrections has announced 23 jobs will be cut in the South Island, across its five prisons and Christchurch regional office.
Corrections chief executive Ray Smith said 130 positions would be lost as part of a nationwide restructuring and reorganisation of the national and some regional offices.
Mr Smith said no frontline staff would be affected by the job cuts.
The Otago Daily Times understands at least one support staff member at the Otago Corrections Facility in Milburn has lost their job.
A department spokesman was unable to give details of the impact on particular facilities or confirm how many jobs at the Otago Corrections Facility in Milburn were affected.
The 485-bed prison employs 200 staff.
The jobs affected are management and support positions in regional offices and the national office in Wellington.
Under the changes, the country will be split into four regions, instead of three. The southern region will include only the South Island, removing Wellington.
There are five prisons in the southern region - Christchurch Prison, Christchurch Women's Prison, Rolleston Prison, the Otago Corrections Facility, and Invercargill Prison.
Mr Smith said the restructuring followed consultation with Corrections staff.
"My aim is to bring together our three service arms - prisons, rehabilitation and probation - to work as one team and be responsible for the day-to-day management and rehabilitation of all offenders across the country."
The changes have been welcomed by the Corrections Association of New Zealand (Canz), which represents frontline staff.
Canz president Bevan Hanlon said while the union sympathised with those losing their jobs, it believed the cuts were necessary because there were overlaps between some areas of management.
"It means that we [frontline staff] don't report to 20 different people, just the prison manager."
The Public Service Association said Corrections must try to redeploy staff whose positions had been lost.
The new structure will be implemented from September.
The news follows last month's announcement that New Plymouth and Wellington prisons will close along with some parts of Arohata, Rolleston, Tongariro/Rangipo and Waikeria prisons, and Invercargill and Auckland prisons will be refurbished.
