IBM has made a quarter of employees at its 'Flight Deck' facility at Baulkham Hills in north-western Sydney redundant.
Some of the 19 roles affected, including people supporting contracts with Myer and Cathay Pacific, have been offshored to China.
Others were to be abolished entirely. These included staff working on Westpac, Qantas, MLC and Federal Government contracts.
The Australian Services Union (ASU) has feared redundancies for several months.
On 12 May, it began negotiating a collective agreement that would include redundancy payments for IBM's Baulkham Hills employees.
While IBM has promised to respond to the ASU's claims, the Union's NSW and ACT branch secretary Sally McManus said workers were "unimpressed" with IBM's actions to date.
The Union said employees who remained on the Westpac contract would be heavily affected by the job cuts, as they would be expected to "pick up all the extra work".
"ASU members who work on the Westpac contract believe that IBM is making a serious mistake as they have targeted some of the most experienced operators," McManus told iTnews.
"They are highly skilled in Tandem which operates Westpac's ATM and POS network ... should there be a fault once these workers leave, there will not be enough skilled workers to respond in timely manner to fix this fault."
The Union warned that all clients with IBM employees taken off their contracts were likely to be affected.
IBM disputed this, claiming in a statement that its "ability to meet client needs is unaffected."
"IBM continuously transforms its business, rebalancing skills and capabilities in order to meet the changing needs of clients and our business as a whole," it said.
A Westpac spokesman was unaware of the redundancies as of 11am. She later said it was an "internal resourcing issue" for IBM, and declined to comment further.
Union members also understood that there were likely to be more job cuts in future, and were anxious to come to a collective agreement with IBM.
"Workers who have not been made redundant are now even more resolved to win a collective agreement as IBM managers have told them there is likely to be even more cuts in the future," McManus said.
IBM said it was working directly with employees throughout the "redeployment process", and would "engage" with the ASU as required by Australia's Fair Work Act.
Updated at 3.50pm to include IBM and Westpac's statements.