Rod Sims, Chairman ACCC.

Rod Sims, Chairman ACCC. Photo: Jim Rice

The federal government's competition watchdog is the latest agency looking to cull its workforce through redundancies.

Bosses at the cash-strapped Australian Competition and Consumer Commission say they have been given a government bailout to pay for golden handshakes among the 870-strong workforce after a frank admission that a "natural attrition" strategy was not working.

The commission said on Wednesday that it did not know how many positions would be cut from the ACCC and its subsidiary agency, the Australian Energy Regulator, during the redundancy drive.

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The commission has been in financial strife for several years. It lost $25 million in the latest financial year and is projected to run out of money by April without a bailout.

The ACCC asked Treasurer Joe Hockey late last year for an additional $100 million to carry out extra duties, claiming it would go broke by April without a cash injection from the government.

In an email sent out to his staff this week, the commission's chairman, Rod Sims, told workers that "these discussions have been going well and will involve some budget supplementation".

But it is understood that senior ministers have attached strings, in the form of a management restructure, to the bailout. Mr Sims confirmed that money had been secured to pay for redundancy payouts and that the commission would have to get used to "doing less".

"As part of our budget supplementation discussions the government is providing us with financial assistance to enable us to bring our staff numbers down through a voluntary redundancy program that will commence immediately," Mr Sims wrote. "The effect of this will put us on the path to a lower level of employee resourcing in the medium term.

"This will mean some combination of doing things more efficiently, and doing less, which commissioners and management will discuss in detail over the coming months."

The commission's senior executives are being encouraged to apply for the generous "incentive to retire" payments available to public service high-flyers, while more junior staff would be eligible to try to find employment elsewhere in the bureaucracy just four weeks after taking a payout.

The chairmen also joined a growing group of public service leaders to concede that the government's preferred method of trimming bureaucratic jobs, natural attrition, was not working.

"We had hoped … that the effect of employees leaving from time to time to take up other opportunities, coupled with reduced recruitment, would lower our staffing cost to more affordable levels," Mr Sims wrote.

"However, with our very low rate of natural attrition over the last couple of years, this has not happened."

The commission would not confirm on Wednesday how many jobs were likely to go or how much money had been set aside for redundancy payouts.