London, Aug 3 : Arnold Schwarzenegger has signed an order slashing 20,000 government jobs in California and cutting the pay of 200,000 other employees in a bid to save the state from "a full-blown cash crisis".
The state's Republican governor said the action was necessary given California's failure to enact a budget for the current fiscal year, which began on July 1.
The state faces a massive 15.2 billion dollars deficit and Democratic and Republican lawmakers have so far been unable to agree on a spending plan.
Schwarzenegger denied his move was political and aimed at forcing legislators to break the stalemate, insisting it was vital to free up funds given the "terrible situation".
"I have a responsibility to make sure that our state has enough money to pay its bills. The executive order that I will sign here today will free up money to help cover the state's costs," Telegraph quoted him, as saying.
The decision was "not an action that I take lightly", he added, acknowledging it would "affect people at a time when they are already struggling".
Slashing seasonal and part-time jobs and cutting state wages could save up to 1 billion dollars a month, according to estimates.