Schwarzenegger Issues Layoffs, Mandatory Unpaid Leave For State Employees

December 20, 2008 8:56 a.m. EST

Sacramento, CA (AHN) - California Gov. Arnold Schwarzenegger issued an executive order mandating all state employees take two days a month of unpaid leave.

He said the move was needed because of a record budget deficit and no agreement among state lawmakers on how to fix the problem.

The Republican governor also ordered a 10-percent workforce reduction for all departments, which could be accomplished through layoffs. The furloughs and layoffs will begin in February and run through 2010, Schwarzenegger said in his executive order.

"I regret having to take these steps, but I wanted you to hear directly from me about them so you know what to expect," Schwarzenegger stated in a letter to California employees.

He said the state deficit is now at $15 billion and there's a risk it could balloon to $42 billion in the next 18 months.

"Without immediate action, the state will not have enough cash to meet its obligations starting in February," Schwarzenegger said in the letter.