"The canton of Bern doesn't have enough money and it is the civil servants who are paying the price," Michael Gerber, a spokesman for the regional teacher's union LEBE that helped organize the demonstration, told AFP.
Gathered in Bern's main square, the Bundesplatz, the demonstrators urged the cantonal government to "Stop the demolition".
The canton has, according to the ATS news agency, balanced its budget by binning automatic public sector salary increases and slashing some 55 million francs ($59 million) in spending, especially in the school and health sectors.
"Salaries have basically been frozen, (and) working conditions are far from what they should be," Gerber lamented.
He pointed out that the canton six years ago scrapped a law that previously ensured regular salary increases for teachers, instead allowing lawmakers to decide each year whether there is enough money in the pot to up their pay.
The demonstration, which reportedly marked the biggest protest by Bern civil servants in more than a decade, should also be seen as "a message against the bad financial policies," Beatrice Stucki, a Socialist parliamentarian and head of the SSP civil servant union, told ATS.
Charging that the canton government was handing out tax breaks to the wealthy while cutting spending on education, security and healthcare, she demanded "resources for all" to avoid the creation of a "two-tier society."