Air New Zealand, the country's flagship carrier, warned Monday that it is considering cutting jobs by as much as 30%, according to an internal memo sent by CEO Greg Foran to staff members.
"One of the harsh realities we find ourselves facing is that we will require fewer Air New Zealanders as we move to grounding most of our international operations," read the notice, which was forwarded to CNN by the company's public relations team.
"Based on what we see today our 12,500 workforce will reduce by up to 30%," the memo said.
"To minimize the level of redundancies we are strongly encouraging staff to take annual leave, long service leave or leave without pay where practicable."
The airline added that it would be "unlikely" to fly the same capacity or number of customers in the next 12 months.
On Monday, New Zealand Prime Minister Jacinda Ardern also warned of a "significant" economic impact from the novel coronavirus outbreak during a press conference.
"The preliminary advice I have received from the Treasury this weekend is that the economic impact of the virus on New Zealand could be greater than the impact of the global financial crisis," she said.
As a precautionary measure, New Zealand will also cancel all public gatherings involving 500 or more people, with the exception of schools or universities, she announced.