"The governor and the legislature are making progress in talks," said Schwarzenegger's press secretary, Aaron McLear
The Republican Governor declared fiscal shortfall in Dec. From then on, he has had war of words for months with the Democratic majority over alleviating the state's $11.2 billion revenue shortfall.
"We need to continue working toward a budget that helps keep and create jobs," said Assembly Speaker Karen Bass, a Democrat, after Schwarzenegger announced the possible layoffs.
"There will be a vote on such a budget this week and, with compromise and leadership on all sides, we can help stop the problems being caused by the cash crisis and avoid the governor's dire warning on layoffs."
Senate President Pro Tem Darrell Steinberg told the Los Angeles Times that a vote will be held to decide on the bailout in Senate on Friday, Feb 13.
The layoff would save $750 million for the year and the layoffs will not happen till July 1 starting with employees of least seniority, McLear said.
However, Schwarzenegger and lawmakers are trying to avoid the scenario of layoffs.
OneIndia News (With inputs from Agencies)