TAFE NSW staff are facing job losses amid a move towards online learning as the vocational education provider undergoes a major overhaul.
Ten separate institutes within TAFE will be merged into a single body to save money spent on administration, NSW Skills Minister John Barilaro announced on Wednesday.
He said funds from TAFE asset sales would be redirected into on-the-ground and digital training.
It's expected some jobs will go but Mr Barilaro would not give an exact figure.
"When we have an organisation that is top heavy, of course we're going to see some job losses," he said.
An April report found TAFE NSW costs were higher than other TAFEs around the country.
Some 40 to 60 cents in every dollar from TAFE's $1.9 billion budget is spent on administration and back house costs, it wrote.
Only three-quarters of TAFE NSW property is currently being used, Mr Barilaro said, adding that under-utilised assets will be sold and funds reinvested into new facilities.
A TAFE digital education headquarters is proposed for regional NSW, while 12 new digital learning centres will be built at unconfirmed locations across the state.
Acting President of the NSW Teachers Federation Denis Fitzgerald believes the increase in online learning flies in the face of the TAFE NSW charter.
"You can't smell bread online, and you can't give that hands on training," he told AAP.
"The `digital revolution' is just cost cutting," he said.
The state government will now negotiate with TAFE NSW to finalise a more detailed restructure plan.
Shadow Skills Minister Prue Car believes the Baird government's bid to bring all the institutes under one centralised organisation is a move towards further privatisation of the training provider.
"This is just a shuffling of the deckchairs. My fear is that this is management speak for even further cuts," she said.
But Mr Barilaro was quick to outline TAFE NSW would not be privatised "now or in the future".
The NSW Department of Industry says TAFE student numbers have more than halved in three years, from 539,146 in 2012 to 255,781 in late 2015.
The Teachers Union has meanwhile sought an urgent meeting with the NSW government to discuss the restructure.
