A total of 56 jobs are set to be cut at AgResearch.
The crown research institute says it will begin consulting with staff today after net science revenue was forecast to be down by $5.3 million for the 2016 financial year.
AgResearch has proposed to reduce 33 scientist jobs and 50 science technician roles in areas where customer demand and the potential for impact is reducing.
However, this will be offset by the recruitment of 18 new scientist roles along with nine science technician positions in growth areas.
"Declining R&D investment in some areas means that we are currently facing a significant and ongoing funding challenge in those areas," AgResearch chair Sam Robinson said in a statement.
"These proposed changes are consistent with our overall strategy for science and what we have identified with our customers.
"We do not intend to completely stop research in any particular area. We are working closely with our stakeholders to ensure we continue to deliver to their needs.
"We will be consulting with our staff on what's been proposed and listening to their feedback before making any final decisions."
AgResearch expect to make a final decision on the proposals by the end of October.