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A document titled ''proposal for change'', distributed to hospital staff on Monday and leaked to the Otago Daily Times, details the roles that may be axed and the reasons behind the move.
The nurse, who did not wish to be named, worked at the hospital for more than six years and said she had spoken to several staff members since they were told about the Waitaki District Council-controlled company's 18-page proposal.
The former staff member described the document as ''cut-throat''.
''I don't think anybody really expected it,'' she said.
''There may have been a couple of positions they thought may go, but not to that extent.
She was told staff were asked to attend a series of 10-minute group meetings, at which they were given a copy of the proposal.
Some senior staff whose jobs would be cut under the proposal met management personnel before the meetings, she said.
''They just feel gutted and worthless. It's just the way they went about it.''
She said morale at the hospital was ''pretty flat''.
''There was already a lot of talk in the corridors and people feeling like they don't know what's happening, but this just compounds that really.''
She also feared experienced nurses would be lost, which she said might affect ''good, basic nursing''.
Under the proposal, the current 35.3 full-time equivalent nursing roles would be slashed to 20.5 and there would be additional responsibilities for senior nurses on duty and an increase in healthcare assistants.
Administration, occupational therapy, orderly and cleaning roles are also affected, potentially saving more than $1.5million in wage costs annually.
Waitaki District Health Services chief executive Ruth Kibble said the restructure was needed to ensure the hospital had the best possible mix of staff.
''The challenge that Oamaru Hospital faces, as with other rural hospitals, is the need to ensure that the workforce has the right skill mix and competencies to address the varied needs of those who access the services, whether that individual is admitted, seen in the community, or stabilised awaiting transfer.
''As such, there is need to ensure within WDHS that our staff have a broad skill mix to meet the diverse demands, but also to enable issues relating to working conditions as described above to be addressed.''
Ms Kibble said reactions from staff had been mixed and she said some might resign before the end of the consultation period on March 11.
''Staff can see the opportunities in the review to enhance delivery of services into the community. This is an incredibly challenging time for us all.
''We appreciate this consultation document affects some incredibly dedicated and loyal staff of WDHS.
''It is our intention to ensure individuals are supported throughout the entire process.''
She was confident services would remain stable throughout the process.
''Planning has been undertaken to ensure that there is no disruption to the community during this consultation period.
''No services will be affected and there will be no reduction of services provided to the community.''