HAVANA, (Reuters) – Cuba is moving up to a million  employees, or a fifth of its workers, off bloated public  payrolls and into jobs where they actually have to work,  according to Communist Party and government sources.

The goal is to boost the island’s struggling economy by  targeting what President Raul Castro has called “unnecessary  workers” in a five-year project to reorganize its labor force  in tandem with some economic liberalization.

“We hope to eliminate 200,000 jobs per year, as much as  100,000 of them over the coming year in the capital alone,” a  Communist Party economist said, like others asking that his  name not be used.    Castro said in a speech to young party supporters in April  that payrolls would be cut to help modernize the economy and  that there were possibly more than a million excess workers.

All state agencies were ordered in January to review  payrolls with an eye to trimming unneeded positions, apparently  with dramatic results.

“We have 304,000 employees, of which it is necessary to  reorient 79,000,” Domestic Trade Minister Jacinto Angular Pardo  said in an interview in the latest edition of Bohemia magazine.

“We will do this gradually over five years as part of a  reorganization of the company system, distribution networks and  forms of administration that rid the state of unnecessary  burdens and improve efficiency,” he said.

The plan is just getting under way, so there have been few  layoffs so far, sources said. They said those being let go are  offered other jobs when available.

Hundreds of employees at the SEPSA security service in  Havana were recently given the choice of jobs in agriculture,  construction or the local version of the FBI, a worker said. “The plan is that those over retirement age will be let go  and the rest offered up to three possible jobs,” said a former  party leader in eastern Holguin, with similar reports coming  from various other provinces.

Options are limited because the state employs about 85  percent of the work force of 5 million and claims an  unemployment rate of only 2 percent.

Those who do not accept initial job offers will have to  look for work at the Labor Ministry, get land through the  government’s agriculture land-lease program and take up  farming, or live off family remittances and illegal activity.

They will get unemployment benefits for just six weeks, but  will not be totally out in the cold because all Cubans receive  free health care and education, subsidized utilities, a  subsidized food ration and automatic adjustment of mortgages to  10 percent of the top breadwinner’s income.