Five Illawarra RailCorp electricians face a troubled Christmas after being told they will no longer have a job in the new year.
Electrical Trades Union NSW secretary Steve Butler said RailCorp had informed 21 electricians in the Wollongong-Sydney-Newcastle region on Monday they would be replaced by contractors.
Mr Butler said it was a cruel blow for workers "on the eve of Christmas".
He said past RailCorp reviews had confirmed that retaining electrical maintenance personnel within the company was the most efficient way to maintain assets and respond to critical incidents.
"This restructure has the potential to seriously impact rail customers from early next year, leading to delayed response times to breakdowns and other emergency situations," Mr Butler said.
"The potential impact on customers from this outsourcing of front-line jobs will be substantial, with industry insiders telling the union that response times could routinely be between six and 48 hours for major incidents that occur outside business hours ... including blackouts at underground stations."
A Sydney Trains spokeswoman said the department was considering "a number of changes" under workers' existing enterprise bargaining agreement, and relevant unions were being consulted.
"Since July 1 and as part of the ongoing reform program, a review of the Customer Service Directorate at Sydney Trains has taken place," she said.
"The proposals include the restructuring of Facilities Maintenance to manage and reinvest in our assets and provide improved customer service.
"Under the proposal, the existing electrical team will be moved into a single delivery arm, with strengthened electrical contracts which are more closely aligned with other teams focusing on the customer environment."