The Department of Foreign Affairs and Trade has denied it is cutting staff, despite the public sector union saying 60 jobs are set to go.
The Community and Public Sector Union on Wednesday said 50 jobs would be lost in Canberra, while 10 positions across eight international posts would be lost.
Some of the cuts will happen at the SES levels to consolidate teams. All other job cuts will happen at the EL1 and EL2 level.
According to the union, the department planned to use attrition and redeployment to achieve the cuts without resorting to redundancies. The union said DFAT was currently below its average staffing level cap and was still advertising 40 roles in Canberra.
A letter attributed to acting secretary Tony Sheehan blamed the cuts on budget pressures.
"The senior executive has made tough decisions to deliver a balanced budget this financial year and lay the groundwork for sustainability in the years ahead," he reportedly wrote.
"We have decided on savings to operational budgets across all groups and the overseas network. In addition we will need to reduce our salaries budget which means that we need to downsize by 10 overseas positions and 50 positions in Australia."
However in a statement on Wednesday evening, Mr Sheehan denied there would be any cuts.
"DFAT is not cutting any staff and has not been advised by the government of any budget cuts," Mr Sheehan said.
"DFAT remains resourced to deliver consular and passport services, and deliver on the government's foreign, trade and development policy agenda."
The department failed to respond to further requests for information.
Community and Public Sector Union deputy national secretary Beth Vincent-Pietsch said the cuts were ill-timed.
"Cutting jobs from the Department of Foreign Affairs and Trade is just not is our economic or national interest," she said.
"This pandemic has shone a light on how important the work of DFAT is. Our members have been working hard to bring Australians home from across the globe and ensure their safety, as well as continue our important trade and diplomatic work."
Ms Vincent-Pietsch said the cuts would have a significant impact on the department's ability to push Australia's national interest.
"If the Morrison government think they can run an arm of Australia's soft power like a business, they are terribly mistaken," she said.
"DFAT has not met its average staffing levels, and given the increasing global challenges we face, the government should be increasing DFAT number not cutting them."
Labor's foreign affairs spokeswoman Penny Wong said diplomacy was essential to keeping Australia safe.
"Labor welcomed Scott Morrison's recent announcement on enhanced defence capability - that's critical. But it won't be enough to deliver Australia's security and economic recovery," Senator Wong said.
"If we are truly going to keep Australians secure and promote our national interest, we need to be more self-reliant and ambitious in our foreign policy. Australia's diplomats are critical to this."
Senator Wong also said the cuts were an "indictment" on Foreign Minister Marise Payne.
She cited an opinion piece from Liberal backbencher and former ambassador to Israel Dave Sharma, who said DFAT had failed in the "Canberra bureaucratic struggle for budget and resources".
"It has failed to sell its value to the political class, to cultivate champions within the cabinet, or position itself with solutions to the government's challenges," Mr Sharma wrote.
Senator Wong described this as an "unsubtle" attack on Senator Payne over her "weakness in Cabinet".
She said Senator Payne had proven "utterly incapable of defending her Department during the biggest global crisis since World War II".
Senator Payne was contacted for comment.
Labor MPs and senators from the ACT said the cuts were the latest in a long line to hit the Canberra bureaucracy.
In a joint statement, Senator Katy Gallagher, Andrew Leigh, David Smith and Alicia Payne said DFAT's cuts make 130 public service jobs lost since March.
"Public servants cannot be used as a means to make easy budget savings at a time when they are performing a crucial and important role in the response to COVID-19," they said.
It comes as DFAT has temporarily returned 300 staff and 800 of their family members to Australia as coronavirus infections and death tolls climb internationally.
The department has also been at the centre of a mammoth effort helping Australians return from overseas amid the disruption to international travel caused by COVID-19.
Between March and May, it fielded more than 70,000 emergency calls from Australians abroad. By comparison, the department answered 48,000 emergency calls in the 12 months to June 30 last year.
However the department has been grappling with a falling share of the budget.