More than 250 public servants at the Department of Immigration and Border Protection face the sack as the department moves to outsource its key call centres to a private operator.
The move presents a "serious security" risk, with no guarantee that the call centres would continue to be staffed by Australian workers, according to the main public service union.
The majority of the job losses will be at Immigration's Sydney Service Centre where more than 220 departmental employees take calls about visas, citizenship and respond to other compliance queries.
The work of two overseas centres, provided by Immigration to cover different time zones, are also to go to the private sector.
The centre in London employs 20 workers and and another in the Canadian capital Ottowa where 12 people work, will also be farmed out to private players in the next 12 months, departmental boss Mike Pezzullo says.
The offices take calls from a wide base of users, including businesses with inquiries about sponsoring overseas workers and have traditionally been an entry point for public servants to get a start working with the department.
Last week's Budget papers revealed the department was to downsize by 250 but provided no details on where the axe was to fall.
But Mr Pezzullo has told his public servants in his post-budeget address that the call centres are to go private.
"The Budget will result in the call centre functions performed by the Department in Sydney, London and Ottawa being outsourced," the departmental secretary.
"The change to a private provider is still at least 12 months away, and in the meantime we need to continue the valuable work that is performed at these centres in supporting Australia's economy and our national security."
The Community and Public Sector Union's National President Rupert Evans said the decision was "devastating" for the affected workers.
"This is devastating news for more than 250 people who are committed to providing an essential public service.
"They're concerned not just at losing their jobs, but the serious security and other risks posed by farming their work out for the private sector to chase a profit.
"These call centre staff deal with a wide range of often complex inquiries and have access to extremely sensitive information.
"Given those training and security issues they can't see how a private operator will result in any outcome other than the department paying a higher price for an inferior service."
Mr Evans said there was no guarantee that the department's telephone service would continue to be provided by Australian workers.
"We are particularly concerned that the department has refused to guarantee that the company that wins this tender will use a call centre based in Australia," Mr Evans said.
"Public services should be locally provided.
"The general public knows that service standards are going to slip further when private interests put their profits above people.
"There is a government agency that's taking a far more sensible path that [Immigration]...would do well to follow, with Defence realising that it can save money by bringing jobs back in house rather than farming work out to the private sector."