Almost 3,000 civil servants will have been paid off under Stormont's voluntary exit scheme by the end of May, an Assembly committee has heard.
It is expected to lead to £86m in savings by the end of the first year of the strategy, the head of the civil service, Dr Malcolm McKibbin, said.
The eventual total of public sector job losses is likely to be around half the 20,000 originally envisaged over the next four years, Dr McKibbin added.
Initial estimates set the cost of laying off individuals at around £35,000 each, under which the 20,000 redundancies were projected.
But that has been revised downwards to around 10,000 because costs are expected to increase as time goes on.
At first, a total of 7,285 people applied for the package, which included a month's pay for each year of service, up to a maximum limit of 21 months.
Around a third of individuals who received offers to leave decided in the end to reject the packages and stay on.
Dr McKibbin claimed decision-makers did not consider 20,000 redundancies to be necessary, and he said that number was never a target.
He added: "We will reduce the size of the Civil Service and the wider public sector in a manner which allows us to continue within our budget.
"I would think the ultimate figure at the end of the four years will be nearer to 10,000."
The overall extent of the ongoing revamp was spelled out to Stormont's Finance Committee. As the public sector is being down-sized, the number of Stormont departments is being shrunk from the present 12 to nine in time to begin operating just after the May Assembly election, committee members were told.
Dr McKibbin, whose 30 years of experience includes stints at the most senior positions in the Department for Regional Development and the Department of Agriculture and Rural Development, said: "This is a major programme of reform.
"In my time in the civil service, there has never been a programme of this scale at the same time as downsizing."
He added that reform was necessary and that the voluntary exit scheme was "designed to try to achieve a permanent reduction in the pay bill".
By the end of May, nine months since the scheme began, the Civil Service will have released 2,952 employees, generating £24m in in-year savings.
After a full year, the figure is expected to grow to approximately £86m.
Quizzed by MLAs, Dr McKibbin said: "We cannot continue doing the same things the same way with 17% fewer posts.
"Strategic workforce planning will follow from this point.
"The service will be in a much better shape to then go on to the next stage of three-to-five-year plans to make it a much leaner, fitter and more agile organisation."
A system offering voluntary exit from the Northern Ireland Civil Service, as well as a separate mechanism for releasing members of the wider public sector, was established following the Stormont House talks.
Estimated pay savings
from lay-offs by the end
of first year of scheme