Puerto Rico to lay off 16,000 workers, cut deficit

SAN JUAN(PUERTO RICO): Puerto Rico's government announced Friday that it will lay off more than 16,000 public workers in the US Caribbean territory, adding to an unemployment rate higher than that of any US state.

The government hopes the layoffs will help close a $3.2 billion deficit as the island struggles through its third year of recession and a 15 per cent unemployment rate.

Union leaders announced an island-wide strike in protest on Oct. 15.

The layoffs of 16,970 employees are needed to prevent the government from shutting down and sinking the island's credit, said Carlos Garcia, president of the Government Development Bank of Puerto Rico.

``Today is an extremely difficult day for all Puerto Ricans,'' he said.

Most workers will be laid off Nov. 6 in a move expected to save some $386 million, he said.

However, 500 of those workers will be contracted by the Treasury Department to help collect $3.6 million in outstanding debts owed by residents, private corporations and other entities.

It is unclear whether the contracts will just be temporary. Jose Rodriguez Baez, president of a union that represents about a third of the island's 200,000 public employees, said that other protests beyond the strike also are planned.

Rey Rosario, a 34-year-old teacher, argued the layoffs will only worsen the economic crisis.

``This will have a domino effect on the economy because with less income there is less consumption,'' he said. ``This is an insensitive act, and layoffs should always be the last alternative.''

Some 8,000 workers were already fired in May, and it is unclear whether more layoffs are planned.