A major restructure at Sydney’s Powerhouse Museum will result in staff numbers being slashed by a fifth to save $5 million from the organisation’s payroll.

Director Rose Hiscock has revealed that the cuts, which had been rumoured for some time, will result in 55 job losses as 35 work units are condensed into 16.

Ms Hiscock, a former Australia Council manager, took over in July from Dawn Casey, who was forced to reapply for her job as director after it was publicly advertised.

The museum of science and design has experienced reduced income from philanthropy and sponsorship and a declining audience.

Last year 380,000 people visited the museum, which receives $29 million a year from the NSW state government.

Ms Hiscock described the restructure as “responsible management”.

“We’ve benchmarked our employee costs to total operating budget and it needs to be at a sustainable level,” she said.

Salaries at the museum currently account for 72 per cent of annual income, whereas Ms Hiscock said the industry standard was 50 per cent.

The three-month organisational restructure will require many staff to apply for new roles. Those who elect not to, or miss out on a role, will be offered redundancy, she said.