The White House had sought an emergency stay of an injunction issued by U.S. Judge Susan Illston of San Francisco in a lawsuit brought by labor unions and cities, including San Francisco and Chicago.

A split three-judge panel of the U.S. 9th Circuit Court of Appeals found that the staff cuts could have significant ripple effects and should stay on hold while a lawsuit plays out.

A U.S. appeals court on Friday refused to pause a judge's ruling blocking President Donald Trump's administration from carrying out mass layoffs of federal workers and a restructuring of government agencies as part of a sweeping government overhaul.