Callaghan Innovation cuts: 15 roles likely to be axed after Budget day

Friday, 9 May 2025

Another 15 jobs at Callaghan Innovation are set to be cut in two weeks.

At least 15 roles aimed at helping commercialise scientific breakthroughs at Callaghan Innovation will be axed the day after this year’s budget, dismaying members of the startup sector spoken to by The Post.

The cuts come on top of 43 redundancies already in train from February, and another subsequent proposal that would see 64 scientists, researchers and others cut.

The Government plans to close Callaghan Innovation entirely by 2026. It will establish a new Public Research Organisation to focus on delivering research in AI, synthetic biology, aerospace, medical and quantum technologies.

The Public Services Association (PSA) union said the latest cut of 15 would come from Callaghan Innovation’s Frontier Ventures unit, and would be announced on May 23.

Science, Innovation and Technology Minister Dr Shane Reti has been contacted for comment. Current Frontier Ventures staff could not comment on the closures, but did confirm they were employed until May 23.

Frontier Ventures provides support and business advice to science and technology startups for global expansion and to commercialise research. One of the businesses it has helped is aquatech startup Premium Seas New Zealand.

Premium Seas founder and chief executive Lucas Evans says there are more risks for startups without support from Callaghan Innovation.

Founder and chief executive Lucas Evans told The Post that Callaghan Innovation’s team filled a gap for the company’s long-term growth.

“They were fulfilling a critical missing capability in our team that we otherwise wouldn't have been able to do commercially,” Evans said.

“Removing that support discourages innovation and potentially loses a future opportunity across different sectors. It loses confidence.”

Establishing exports

Premium Seas manufactures seaweed-based ingredients for use across cosmetics and health products, and was onboarding customers overseas and establishing export markets with the help of Callaghan Innovation.

“Their support has contributed to success in an international marketplace. The impact on the business is significant,” Evans said.

He said losing the department would remove a key support network for the startup sector and would prevent more startups from commercialising research technologies.

“It’s another layer of risk to activity. It slows progress and removes opportunities to improve the way that we do things. On a personal level, as a founder and leading an organisation, it removes an important support network and increases uncertainty [for startup founders].”

Evans said that focus on developing early-stage innovation in New Zealand business was not available elsewhere or was less comprehensive than what was on offer in the current market.

SetSeed co-founder and chief executive Chris Parnell says Frontier Ventures was key in getting interest from international investors.

Callaghan had explored the prospect of a fee-for-service model alongside Evans when the agency was proposed to shut down, but the proposal was not pursued by policymakers.

Advice lost

Small business website development company SetSeed also found its feet under the Frontier Ventures programme. Co-founder and chief executive Chris Parnell told The Post the company had seen healthy profit growth and international investor interest with the help of Callaghan Innovation’s startup support team.

“I felt like Callaghan met me at my level - they understood your vision, product and if you have something that can be globally scalable,” Parnell said. “We're now talking with investors and venture capitalists have reached out globally. We’re getting things set up and Callaghan has been brilliant at that.”

He said the Frontier Ventures team provided strategic guidance and a much-needed confidence boost for Parnell and had different teams to work through issues like funding and tax concerns in international markets.

Another major pull was the community it fostered between startup founders and losing that could isolate more Kiwi innovators.

“You were really starting to meet other founders who were in different parts of their journey. Being able to create a community and rub shoulders with all these people was fantastic,” Parnell said.

“We're only going to grow as a tech sector if there's synergy, which is everyone talking together. Otherwise we're all siloed.”

Fleur Fitzsimons from the Public Service Association (PSA) said the problem was there was no one else picking up the work being lost from Callaghan - and that would continue until the new organisation was set up.

Future

He said Aotearoa’s startup ecosystem had kept the spirit going through social media chats and the like, but that didn’t make the future of the sector any clearer.

“We've kept the spirit going knowing that it's really needed, even though those organisations set up to support startups have been defunded and withdrawn from the tech sector. There's a bit of confusion about what's next,” Parnell said.

PSA -Te Pūkenga Here Tikanga Mahi national secretary Fleur Fitzsimons said Frontier Ventures’ fully-funded expert advice to startup founders would not be retained elsewhere in Government.

“There is no government agency picking up this work – the next wave of smart, innovative Kiwi entrepreneurs are being left high and dry,” Fitzsimons said. “The service will not be picked up by the private sector as these companies are fledgling businesses with limited resources.”

“If the Government wants to nurture the next Rocket Lab, then the wraparound services offered by the commercialisation team are exactly the support start-ups need to go to the next level,” she said.

Newly appointed Ministry of Awesome chief executive Graham Scown says startup support wouldn't be cut but reallocated.

Disagree

Not everyone agreed the loss of Frontier Ventures would slow the commercialisation of great science. Graham Scown, newly appointed chief executive of Christchurch startup incubator Ministry of Awesome said the closure of Frontier Ventures would not make a dent on the startup sector and that funding and services for startup support were being shuffled.

“It's a reallocation and a consolidation by the Government,” Scown told The Post.

“Callaghan's been a fantastic organisation that has done some really amazing things … It's not a reduction in funding. They're looking for ways to provide a better focus for the use of that money.”

He said there was no indication that the support for commercialising and advising startups was going to be stopped by the Government.

The Ministry of Awesome supported startups with advisory support and mentorship and has received Callaghan Innovation funding for various projects including around $1.5 million founder-development startup programme.

Scown said the existing startup sector provided enough of an opportunity to be successful and make an impact that benefits all of New Zealand. He said Aotearoa had a unique startup ecosystem that didn’t require a lot of Government intervention like other economies.

“All of these things need to be seen as an opportunity … where can we support the sector in a way that’s materially beneficial to the founder ecosystem,” he said.

Scown said losing highly skilled staff from Callaghan Innovation didn’t mean a loss of that expertise for the sector: “In some contexts, that expertise is actually becoming more available, not less.

“The important thing for founders and their startups is, first and foremost, looking at who the people are. There's no business that succeeds without really good people.”