On the heels of Monday’s announcement that state-owned industries planned to eliminate 1.8 million jobs comes a revelation that China might be cutting another five or six million more jobs as a way to rejuvenate its flagging economy.

Reuters cited two sources with ties to China’s leadership that say the vast number of state employees will be culled from “zombie enterprises” over the next two or three years in order to rein in production over-capacity and pollution.

“Zombie enterprises”, a named priority of the Chinese government this year, refers to companies that have shut down operations but continue to keep employees on payroll to placate local governments worried about bankruptcy and unemployment.

The Minister for Human Resources and Social Security, Yin Weimin, announced that up to 1.8 million workers will be laid off in state-owned coal and steel factories. A timeline of the layoffs was not announced. Yin described the layoffs as “very difficult”, but added that the Chinese government remained “very confident”.

To prepare for the layoffs, 150 million tonnes of crude steel and 500 million tonnes of coal production will be cut over the next three to five years. The central government will also designate 100 billion yuan ($15.29 billion) to deal with the impact of the layoffs. The funds don’t deal with the debts held by the zombie companies, which some analysts believe could overwhelm local banks.

The second Reuters source estimated layoffs would reach six million, arguing that “overcapacity is a leftover problem from the Hu-Wen era.”

Former Chinese president and premier, Hu Jintao and Wen Jiabao, stimulated the Chinese economy with four trillion yuan in the wake of the global financial crisis last decade.