California Governor Jerry Brown issued a hiring freeze across state government in the midst of an estimated budget deficit of $25.4 billion.

Hours before the hiring freeze announcement, Brown dropped a lawsuit over reduction of government workers' wages.

Brown said the comprehensive hiring freeze applies to vacant, seasonal, full-time and part-time positions. and will save $363 million in operational costs next fiscal year that begins July 1, about $200 million of which will be in general fund savings.

The order follows earlier moves to cut state cell phones and the passenger vehicle fleet by 50 percent.

We have a $25 billion deficit, and we must do everything possible to save money and make government leaner and more efficient, Brown said. The hiring freeze will be in effect until agencies and departments prove that they can achieve these savings.

The order prohibits departments from hiring outside contractors to compensate for the hiring freeze, converting part-time positions into full-time positions and transferring employees between agencies and departments.

California had about 234,000 employees as of Jan. 31, according to the state controller's office.

In a separate announcement on Tuesday, Brown dropped the minimum wage lawsuit that was filed in August 2008 against the Controller by former Governor Arnold Schwarzenegger’s administration. The state Department of Personnel Administration (DPA) and the Controller's Office are working together to address issues of mutual concern with respect to the payment of the State’s employees going forward.

I am pleased and thankful that Governor Brown saw this litigation as a frivolous waste of hard-earned tax dollars that should be dedicated to fixing our schools, protecting our communities and rebuilding our infrastructure, state Controller John Chiang said in a statement.

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