Publicly owned electricity distribution business Ausgrid is proposing to send 37 IT jobs offshore as unions step up a campaign to protect their workers' job security.
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The United Services Union said Ausgrid management believes it can save $8.5 million a year by outsourcing the jobs to an overseas company.
The company has flagged the loss of jobs and the use of an overseas contractor to provide IT services.
A spokesman for Ausgrid said it is reviewing the delivery of services in its Information and Communications Technology division as part of a "business-wide restructure to reduce non-essential operating costs".
"This includes 37 roles in the area of development and technical support," the spokesman said. "The review includes discussion with unions and staff about the merits of these roles being outsourced to the external market. Ausgrid would expect any external provider to maintain a local presence.
"It's not unusual for an organisation to test the external market to benchmark the efficient cost of delivering services."
Ausgrid employs more than 270 staff in its Information and Communications Technology division. This includes labour hire and senior contract roles.
The spokesman said it is important for Ausgrid to "reduce costs in a responsible way so we can keep electricity prices as low as possible for our customers, helping to keep average price increases over the next five years to below CPI".
"We also remain steadfast in our commitment to no forced redundancies," he said.
The development comes as negotiations begin for a new enterprise agreement for Ausgrid.
Unions are fighting for the inclusion of job protection clauses that would prevent the offshoring of jobs, restrict the outsourcing of work, and protect staff from forced redundancies.
USU energy manager Scott McNamara said an internal review had found $2 million could be saved while retaining the services within the company, and $3.5 million could be saved by outsourcing the services to an Australian company.
"Ausgrid employees are deeply concerned by the potential loss of jobs and outsourcing of essential support services," Mr McNamara said.
"For the sake of a few million dollars, Ausgrid management want to send the jobs of 37 loyal staff.
"Not only will they lose the experience and skills of these loyal staff, but service standards will likely drop as work is carried out by external companies in other parts of the world."
Mr McNamara said the move would not help consumers.
"Networks NSW is driving cost cutting across the business, fattening up the network businesses for NSW Premier Mike Baird's power privatisation," he said.
"If electricity network companies are already looking to cut jobs and send positions overseas, it's no wonder that staff fear massive job cuts from privatisation, which is what happened in Victoria when an overseas buyer took control of the electricity network."
