The Schwarzenegger administration says its plan to lay off thousands of state workers if a budget deal is not reached by Friday is necessary because California is running out of money.
Administration officials want to eliminate up to 10,000 jobs. They project $750 million in savings through the end of the fiscal year.
The governor's proposal comes as budget negotiations between his office and state legislators continue.
The Schwarzenegger administration says the plan to cut jobs is not a negotiating tactic or threat, but reflects the need to save money immediately. California has just $6 for every $10 in bills it owes.
But state employee unions say mass layoffs would hurt California economically without solving its budget problems.