Hydro Tasmania chief executive Steve Davy said that the reduction will position the company to better manage the financial and market challenges it faces over the next few years.

"While the business has provided strong returns to government over recent years, and is again on track to return a record underlying profit this year, the financial outlook for the next few years is challenging," Mr Davy said in a statement.

"In the 2014-15 financial year, it’s expected that profits will fall below $20 million, less than one-tenth of current levels."

Today's decision, Mr Davy said, was the result of a range of factors, including softening demand in the National Electricity Market and the effect of the repeal of the price on carbon on market prices, uncertainty about the future of the Renewable Energy Target, the impact of the energy reform process and the ongoing downturn in the consulting market.

Mr Davy said that the business had already called for expressions of interest for voluntary redundancies and a number of people had left as a result.

He said that it was expected that the remaining positions will go through a combination of voluntary redundancies, natural attrition and compulsory redundancies, with around 50 positions to be impacted at Hydro Tasmania alone.

Hydro Tasmania group’s total workforce stands at 1092.