Almost half the staff working at the Victorian base of Australia's IT research organisation NICTA were made redundant on Monday, after the state government withdrew millions of dollars in promised funding over concerns the organisation was becoming too Sydney-centric.
Management told staff at the Parkville laboratory the cuts would take effect immediately. Of the 70 full-time staff in Victoria, 30 will lose their jobs.
NICTA researchers work on a variety of projects - from designing the visual processing and wireless microchip for the bionic eye to building software that can watch and analyse live cells as they grow. Another project, Gossamer, allows researchers to assemble DNA fragments using cheap computers rather than supercomputers.
It is understood the state government has withdrawn up to $8 million from the $10 million promised over two years.
NICTA chief executive Hugh Durrant-Whyte said the cuts would see three Melbourne-based research groups close entirely: the health and life sciences group; optics and nano electronics; and the control and signal processing research group.
He stressed the collaborative work on the ambitious project to build a bionic eye would continue, as would existing university partnerships with Melbourne, Monash, Swinburne and RMIT.
''NICTA is committed to having a big lab here, but the new lab will be approximately half the size of what it is now,'' Professor Durrant-Whyte said.
One staff member, who wished to remain anonymous, said there was growing concern the ''N'' in NICTA stood for ''New South Wales'', rather than ''national''.
The point was echoed in a statement from Technology Minister Gordon Rich-Phillips. ''NICTA's activities have become increasingly Sydney-focused,'' he said.
He pointed out that NSW leveraged $5 for each $1 invested in NICTA, compared with Victoria's return of just $1.50 for each $1 invested.
Mr Rich-Phillips said the Victorian government would continue to fund NICTA at a reduced level over the next two years, and had not ruled out ''considering new funding arrangements'' if NICTA could deliver benefits to the state.