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Gov. Ralph Northam is imposing a hiring freeze on state agencies, but cautioning against layoffs as the state prepares for a recession triggered by the coronavirus pandemic.

Clark Mercer, the governor’s chief of staff, outlined the administration’s budget strategy in a four-page memorandum to agency heads Thursday that bluntly acknowledges, “We can expect to enter a recession soon.”

“The virus has brought us challenges we have not faced in generations,” Mercer said. “Events are unfolding quickly and require us to prepare for a new reality that is drastically different from what was certain just a few weeks ago.”

The abrupt downturn upends the review and revision of the two budgets the General Assembly adopted on March 12: one for the fiscal year ending June 30 and a $135 billion spending plan for the two-year cycle that begins July 1.

Mercer said the state expects “significantly less revenue” than the most pessimistic forecast Northam’s economic and revenue advisory councils considered last fall and reduced cash balances at the end of this fiscal year that will carry into the next two-year budget and require cuts in spending.

“Our intention is not to cut the budget in the short term, but decisions will depend on how much revenue comes in,” he said.