As many as 10,000 contract workers in various government departments, public sector undertakings, corporations, and boards across the southern Indian state of Kerala are expected to lose their jobs, reports The Hindu.

Finance Department sources told The Hindu that an estimated 7,000 contract employees would be terminated in the initial phase, following approval from the Cabinet. Further job losses are expected in due course.

A recent review identified 30,000 excess posts, of which a majority are manned by contract workers.

The Chief Secretary's office had issued a circular recently against the creation of new posts because of the financial crisis. The government has also been exploring options to cut expenses. The current proposal is to retain a skeleton staff in order to drastically cut the department’s labour costs.

However, securing Cabinet approval is not expected be easy.

Across India, there are 12.3 million temporary and contract workers working in the government sector, representing more than 43% of the 28 million temporary workers in India’s formal employment sector.