The ATO has cut 133 regionally-based jobs as managers scramble to meet the government's productivity cut of 3.25 per cent, the union representing public servants said on Friday.

The community and public sector union (CPSU) says the sacked workers, from Newcastle, Penrith, Chermside, Moonee Ponds and Melbourne, were meant to finish their employment on June 30.

Made up of casuals and contract staff, it's understood they were all employed under "non-ongoing" conditions.

The job cuts would make it even harder for regional job prospects that already are traditionally tight, CPSU Acting National Secretary Mark Gepp said.

"The Federal government's productivity budget cuts come at the expense of the jobs that regional workers and their communities rely on," he said in a statement.

This week, acting Prime Minister Julia Gillard and Treasurer Wayne Swan had repeatedly spoken about protecting jobs and investing in Australian workplaces, he said.

"So you would think the Federal government, of all employers, would (be) trying to create jobs not cut them among its own workforce."

Public sector workers would continue to be threatened by job cuts until the government removed its arbitrary productivity cuts, he said.