One of the federal government's largest departments imposed a ''hiring freeze'' just one day before ministers announced deep cuts to public service spending.
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The Department of Defence has told Fairfax Media a program of "downsizing" will have an impact right across the country.
Defence staff were told on Thursday departmental bosses were "working through actions to agree savings" and that recruitment activity was to cease.
The department employs more than 23,000 public servants across the country, 9700 of them in Canberra, as well as thousands of contractors. It is unclear how the freeze will affect this group of workers whose numbers are not recorded in official figures.
As part of its economic statement, the government announced on Friday the department would be awarded increased payments to $664 million in the next two financial years, but there would be a reduction in its funding of nearly $1.1 billion in 2015-16 and 2016-17.
Written offers of employment made before July 29 would be honoured, Defence staff were told, but there would be no new offers made until further notice. Any verbal offers to job seekers would be "non-binding", the circular declared.
The department's "MediaOps" unit denied a hiring freeze had been put in place and said departmental secretary Dennis Richardson was not available to be interviewed. "Defence is planning further downsizing but there are no current plans for a round of redundancies as per last year," the department said in a statement.
