California may lay off 10,000 state workers

CA Gov. Arnold Schwarzenegger’s administration warned Tuesday that it is preparing to lay off 10,000 state employees if an agreement to close California’s yawning budget deficit isn’t reached by the end of the week.

Administration spokesman Aaron McLear said officials will send out layoff notices Friday absent a budget deal, with the goal of slashing roughly 10 percent of the 100,000 positions paid for by the state’s general operating fund. That would save an estimated $750 million through mid-2010; California faces a $40 billion budget gap over that period.