PHOENIX -- The city of Phoenix is preparing to trim hundreds of millions of dollars from the city budget, meaning 1,200 jobs city jobs will be eliminated next fiscal year, Mayor Phil Gordon acknowledged Tuesday.

"The nation, our state, our city, and -- in fact -- the world are struggling through one of the most significant global crisis we've faced in our modern history," Gordon said at a news briefing.

Gordon announced a three-point plan to help combat that financial crisis. He said the first step will be budget cutbacks in city government, including job eliminations and a two-year hiring freeze.

The second element is creating new revenue. Gordon said he's created a new revenue task force to come up with new ideas on how to bring money into the city. He said the city should extend its contracts with private corporations.

Third, the mayor said the city must continue and accelerate public works projects. He said road and transportation repairs will help create new jobs.

Gordon said he is asking the state to provide Phoenix with loans to help kick start already-approved projects. he said studies show $100 million in construction will bring in 1,500 hundred new jobs.

He cited a $250 million already-approved project at Sky Harbor that would create 4,500 new jobs in Phoenix. The mayor said the sooner the city can start construction projects, the sooner Phoenix can get people back into the workforce.

"We can cut and run, slash and burn or we can work our way through the challenges and invest in the future," Gordon said.

Gordon also announced his office staff will voluntarily work one day a month without pay or compensation. He said he's also asking members of the worker's union to forgo their scheduled raises this year to help curb the city's budget problem.