Ministers are fast-tracking the launch of a scheme to create 150,000 state-sponsored jobs for youths, to tackle France's rampant unemployment.
French president says in a TV interview that carmaker PSA Peugeot Citroen's plan to cut 8,000 jobs is not acceptable and needs to be renegotiated.
Unions describe the announcement as a "declaration of war" and Social Affairs Minister Marisol Touraine says the cuts are "unacceptable".
The French car manufacturer's cost-cutting plans are likely to lead to thousands more job losses, according to unions.
New French president delays decision on his campaign pledges on minimum wage and retirement age until after June's crucial legislative elections.
Francois Hollande says he is expecting a wave of lay-offs to follow next weekend's election, but pledged his government would not stand idly by.