A US appeals court has 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.

The decision on Friday by the San Francisco-based Ninth US Circuit Court of Appeals means that, for now, the Trump administration cannot proceed with plans to shed tens of thousands of federal jobs and shutter many government offices and programs.

US district judge Susan Illston in San Francisco on May 22 blocked large-scale layoffs at about 20 federal agencies, agreeing with a group of unions, nonprofits and municipalities that the president may only restructure agencies when authorized by Congress.

A three-judge Ninth Circuit panel denied the Trump administration's bid to stay Illston's decision pending an appeal, which could take months to resolve. The administration will likely now ask the Supreme Court to pause the ruling.

The Ninth Circuit court said the administration had not provided any evidence it would suffer an irreparable injury if the lower court order remained in place and said plaintiffs were likely to prevail.

"The executive order at issue here far exceeds the president’s supervisory powers under the Constitution," said the majority opinion from Judge William Fletcher, who was appointed by Democratic president Bill Clinton. He was joined by Judge Lucy Koh, who was appointed by Democratic president Joe Biden.

Judge Consuelo Callahan, who was appointed by Republican president George W Bush, dissented, saying the administration was likely to succeed on appeal and had suffered irreparable harm from having its policy blocked.

Illston's ruling was the broadest of its kind against the government overhaul that was spearheaded by Trump ally Elon Musk, the world's richest person and chief executive of electric vehicle maker Tesla.

Along with blocking layoffs, Illston barred the Department of Government Efficiency (Doge) from ordering job cuts or reorganization at federal agencies.

Dozens of lawsuits have challenged Doge's work on various grounds, including claims that it violated labor and privacy laws and exceeded its authority, with mixed results.

Two judges had separately ordered the Trump administration to reinstate thousands of probationary employees, who are typically newer hires and were fired en masse in February, but appeals courts paused those rulings. (Reuters)