California could lay off 10,000 state workers

SAN FRANCISCO, (AFP) – California Governor Arnold Schwarzenegger threatened to fire as many as 10,000 state employees if legislators do not approve a deal later this week to help close the state's projected 42-billion-dollar budget deficit.

The governor's spokesman said layoff warnings would be sent to about 20,000 state workers this Friday if there is no deal.

About half of those workers would have their jobs eliminated by July 1. Employees with the least seniority in each state department would get the layoff notices. The 10,000 job cuts are projected to translate to annual savings of around 750 million dollars.

Most of the state's 238,000 workers already are being forced to take off two Fridays each month without pay.

"We don't have a budget and there's only a few things that the governor can do to save the state money," press secretary Aaron McLear said at a media briefing. "This is simply out of necessity. The state is running out of money."

The governor's warning came as he and legislative leaders struggled to win approval for a package of billions of dollars of spending cuts and tax increases to make up for the budget deficit projected over the next 18 months.

Saying the state is on the brink of running out of money, state Controller John Chiang already has delayed tax refunds and has warned that he soon will be forced to stop paying some state bills or providing funds for some state services.