ANCHORAGE — Two divisions within the state Department of Labor and Workforce Development will be combined in what will be an ongoing effort to streamline state government operations, Gov. Bill Walker announced Wednesday.

Walker at a press conference with Labor Commissioner Heidi Drygas said the Employment Security Division would be combined with the Division of Business Partnerships. The combined agency will be the Division of Employment and Training Services.

The consolidation is projected to save $600,000 annually.

“$600,000 does not balance the budget, but it’s a start,” Walker said.

The Employment Security Division operates job centers throughout Alaska to promote long-term employment. It operates the online Alaska Labor Exchange system that connects job seekers with employers, according to its website. It also provides temporary unemployment insurance benefits to eligible unemployed workers and adult basic education services to adults who need a high school diploma.

The Division of Business Partnerships works with private employers to provide training on sustainable jobs.

The consolidation will not result in layoffs, Drygas said.

“It’s going to result in the elimination of eight vacancies within both divisions, and that really is just a start,” Drygas said. “As we move forward with consolidation, we can identify possibly other vacancies that we can eliminate, as well as other efficiencies.”

It also will eliminate administrative overhead, she said.

“More of the workforce training grants that we have within the department will go out on the streets as grants to training entities to put people through training programs and put Alaskans to work,” Drygas said.

State government has shrunk in other areas, Walker said. He’s sharing a chief of staff with Lt. Gov. Byron Mallott and each department is looking for ways to combine functions and save money.

“You absolutely can expect to see more of that,” he said. “That’s the direction we’re giving.”

Walker also announced that Dryas has declared Alaska a “zone of under employment” as have previous Labor commissioners.

The declaration allows the state to require 90 percent resident hiring on all construction jobs funded with state money. The Labor Department in 2013 under Gov. Sean Parnell had rescinded the determination.

Alaska is experiencing 6.7 percent unemployment, Drygas said. The national average is 5.8 percent.

“This is Alaska’s dollars and Alaska’s dollars on these public construction contracts should be awarded to Alaskans,” she said.