Cuba's main labor organization says the state is to lay off more than 500,000 public sector workers by March.
The Cuban Workers Confederation said the country cannot and should not continue supporting businesses, production entities and services with inflated payrolls. It said the losses hurt the economy and are ultimately counterproductive, creating bad habits and distorting worker conduct.
In the statement released on state-run media, the union said Cuba would change its labor structure and salary system and increase private sector job opportunities.
Currently, the state employs 95 percent of the official work force.
Several weeks ago, Cuban President Raul Castro said his government would scale back its involvement in the nation's economy and allow more Cubans to operate their own businesses and hire workers. He said the aim was to create jobs for Cubans employed by the government who will be laid off.
Some information for this report was provided by AP, AFP and Bloomberg.