MADRID, Spain (AP) _ Spaniards took to the streets in cities across the country Thursday to protest proposed government budget cuts and a plan to make it easier for companies to lay off workers.

The marches were organized by Spain's two largest unions to protest a proposed 1994 budget that would among other things freeze salaries of civil servants and limit the annual increase in pensions to 3.5 percent.

''The government imposing measures against the unemployed, the young, the retired ... won't yield social justice and it's not economically efficient,'' said Antonio Gutirrez, head of the workers Commission Union.

The biggest turnout apparently was in Barcelona, where crowd estimates ranged up to 150,000. Many were from a Volkswagen plant there which has announced plans to lay off 9,000 workers.

Spain is grappling with a 22 percent unemployment rate - the highest in the European Community. The government has been talking with unions about ways to reform the labor market and limit wage increases.

It also wants to make it easier for companies to lay off workers. Currently collective layoffs must be authorized by a special court with input from unions.

Union leaders threatened a general strike unless the government backed off that plan.