The chief executive of the Cairns health district in far north Queensland says a restructure and the axing of more than 200 positions is "terribly distressing" for affected workers.
The Cairns and Hinterland Hospital and Health Board says it is axing more than 200 positions after being ordered to meet state savings targets and losing federal funding.
CEO Julie Hartley-Jones says management did everything it could to avoid cutting jobs.
"There are a whole bunch of, I guess, very senior management nursing positions," he said.
"There are research positions ... I was pleased to see that very detailed breakdown of each position and we are not talking about nurses who walk around the wards."
He says he feels for workers losing their positions but the local economy is rebounding well enough for them to find other work.
"We can't keep doing health the same way that we have for years and years," he said.
"There is not an infinite bucket of money.
"Clearly some areas of health haven't worked and we've seen rates, be it obesity or diabetes, for example, have just skyrocketed in recent years, so we do need to deliver health differently."
Doctors at the Cairns Base Hospital say the local health service should have been rewarded, not penalised, for the cost efficiencies it has made in recent months.
The president of the Senior Medical Staff Association, Dr Peter Boyd, says it is hard for authorities to justify such a big cut.
"Our cost structure is actually low and the last figures I heard were that we were almost 10 per cent cheaper than the average cost of hospitals in Queensland and to ... impose a major cut like this I think is likely to have very major effects on the services," he said.
Ms Hartley-Jones says there has already been a positive response from staff to voluntary redundancy packages and it will consult staff about the restructure over the next two weeks.