Her position as acting business manager in Dunedin has been disestablished, after the winter sports programme was transferred to Snowsports New Zealand and other parts of her job were transferred to Auckland.
Bates was one of the first employees of Academy of Sport South Island in 2000 and led its business operations for 11 years, until its merger into High Performance Sport New Zealand last year.
She played a significant role in the academy and contributed to many high-performance related initiatives throughout the South Island.
She will be manager of the New Zealand athletics team competing at the London Olympics and manager and head coach at the Paralympic Games.
Bates had no warning before she heard the news last week.
"Of course, I'm disappointed. I loved working for this organisation," she said.
"It's what I know and what I'm good at.
"But ... one door shuts and another one opens. That's life. I just have to move on.
"I remember the good times and the impact and contribution I have made to the organisation in the city."
She does not have any prospects at the moment.
"My full focus is on the Olympics. I intend to go to London, do a good job, and come home and look for work."
Chief executive of High Performance Sport New Zealand Alex Baumann, of Auckland, said transferring the winter performance programme to Snowsports New Zealand had impacted on Bates' role.
"Responsibility for the financial and administrative operation of the programme was part of Raylene's role," he said.
"Other parts of her role around the financial requirements for high-performance sport have been transferred to Auckland."
The Dunedin hub of the high-performance programme will still be based in the city, with 12 full or part time employers in coaching roles.
"The hubs are critical for the development of our future athletes .We want to make sure Dunedin continues to be a vibrant hub," Baumann said.
"We want to have a good relationship with the Dunedin City Council."
He intends to visit Dunedin next week to talk to staff and stakeholders.
"We looked at other options for Raylene but at this moment there are no other positions," he said.
Bates has worked in sports administration for the last 15 years and was employed by the Otago Rugby Football Union before she joined the Academy of Sport South Island.
Bates and Keryn Smith, now chief executive of the New Zealand Olympic Committee, grew the South Island Academy from a small room in 2000.
"We had a $360,000 turnover in the first year and it grew to $7.3 million in its best year," Bates said.
"We grew the whole business to provide opportunities for athletes in the South Island.
"We were a very close team and worked for the benefit of athletes and their coaches. The whole experience was ... something quite unique."
Bates was project manager for the High Performance Sport New Zealand regional hub that has been built alongside the Forsyth Barr Stadium and is used by the Highlanders rugby team, other high performance athletes and the Excellence in Sport programme.
