Camacho said he was left with no other choice after territorial lawmakers rejected his proposal to lift tax exemptions enjoyed by many businesses. He also cited the legislature's decision to make deep funding cuts to certain agency budgets.

"The other available option was to fully furlough more than 1,000 employees for the remainder of the fiscal year, crippling critical services to the people of Guam," Camacho said.

"I fully understand the impact such cuts in hours will have on the lives of our employees and ask that the employees reach out to elected officials to encourage them to address the real issue — the lack of adequate revenues due to the many exemptions to business privilege taxes that only certain businesses enjoy," he said.

The affected employees will work 10 fewer hours per pay period, generating savings of at least $11 million for the territorial government.

The work and pay reduction doesn't include employees within the public school system, the University of Guam, Guam Community College, Office of the Attorney General, Office of the Public Auditor and the Mayor's Council of Guam.

The island government, which has incurred a deficit of more than $200 million over the years, is pinning its economic hopes on the planned relocation of 8,000 U.S. Marines and their families to the territory from Okinawa in southern Japan.