Prime Minister Tony Abott's public service department is to cut ''significant'' numbers of jobs in the next 90 days and begin a restructure of its indigenous affairs functions.
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Senior managers have been told the Department of the Prime Minister and Cabinet's Canberra employees will bear the brunt of the pain.
The department's boss, Ian Watt, the nation's most senior public servant, told his staff this week that the department was battling to balance its budget and deliver its programs and that staff would be cut and service delivery reviewed.
Dr Watt did not say how many jobs would go, but said cuts would be significant and would fall across the massively expanded department.
The department's media unit was trying to keep details secret on Friday.
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But in a confidential briefing note to his senior executives, Dr Watt instructed that requests for golden handshakes from senior executives in the top-heavy department should be favoured.
Managers were also told to be on the lookout for employees nearing retirement and looking for one last big pay day.
The executive note is frank about where the axe is expected to fall. ''A large number of staff affected will be Canberra-based,'' it states. ''Whilst there will be some reductions that will occur in our network, front-line staff are less likely to be affected.''
The Department of the Prime Minister and Cabinet - the government's top central department - has almost quadrupled in size under the Abbott government, picking up about 1700 public servants from nine other departments under machinery-of-government changes.
But it is believed to be undergoing significant ''cultural issues'' in integrating public servants from the abolished department of families, housing, community services and indigenous affairs.
Dr Watt said redundancies were open immediately and that he wanted to have the process finished by June 30.
''I envisage the total number of VRs [voluntary redundancies] required will be significant, although an exact number has not yet been determined,'' he said. ''We will be seeking to achieve these reductions by the end of this financial year.''
CPSU official Alistair Waters said that indigenous affairs staff drafted into the department in the past six months now faced more upheaval in their working lives.
''If the Prime Minister didn't know just how much job cuts in the public sector were biting, then he is about to find out,'' Mr Waters said.
