Schwarzenegger spokesman Aaron McLear said Monday the administration will issue 20,000 notices to employees with the least seniority.
The notices will start going out Tuesday to workers in corrections, health and human services and other agencies that receive money from the general fund.
Administration officials are seeking to eliminate up to 10,000 jobs as part of the governor's order to cut 10 percent from the government payroll. The layoffs are projected to save $750 million in the 2009-10 fiscal year.
The governor had delayed releasing the notices Friday when it appeared lawmakers would pass a compromise plan to fill the state's $42 billion shortfall. But a marathon weekend session has so far failed to produce the necessary votes.
Lawmakers spent the President's Day holiday as they had Valentine's Day, locked in a frustrating search for one more vote to end the state's budget impasse.
They broke the record for longest legislative session in state history over the weekend before disbanding Sunday night, with many of them looking haggard and worn out after a futile attempt to secure the necessary votes.
The Senate and Assembly, which at one point was in session for 30 hours, were scheduled to meet again Monday, but the expected budget votes kept getting pushed back.
The New York Times has more on the wretched state of California's finances, which include a bond credit rating that is the lowest in the nation.