Staff morale in the Ministry of Foreign Affairs and Trade has improved since the chaotic and heavily criticised restructuring exercise settled down, chief executive John Allen says.

Mr Allen on Thursday told staff 79 positions will go, 23 policy roles and 56 in corporate services.

His original plan, announced in February, proposed cutting 305 jobs and caused unprecedented public outrage from diplomats.

"We have listened, there has been change, and the decisions as a consequence are stronger," Mr Allen said on Radio New Zealand.

"Morale in the ministry has improved as a consequence of the integrity of the process."

Labour says the damage is done and a backdown on job cuts isn't enough to improve staff confidence.

"The appalling process has caused mayhem at MFAT, damaged New Zealand's reputation and found only minor savings," deputy leader Grant Robertson said.

"The restructuring process has been botched from the very beginning."

Mr Robertson says Foreign Minister Murray McCully must be held responsible and Prime Minister John Key should consider whether he is capable of handling his job.

The original plan was designed to save about $25 million.

The ministry hasn't said how much will be saved under the scaled-back plan.