French President Francois Hollande is preparing a probable shake-up of his unpopular government after his Socialist Party suffered losses in nationwide municipal elections.

Disappointment with the Socialists' handling of the economy drove many voters to conservative or anti-immigrant far-right candidates.

Hollande is having lunch Monday with Prime Minister Jean-Marc Ayrault, whose job is on the line and said himself that the elections were "a defeat for the government." His government has failed to fulfill its promises to cut France's more than 10 percent unemployment and boost growth, which was just 0.3 percent last year, according to figures released Monday.

Interior Minister Manuel Valls is among names circulating as a possible replacement prime minister if Hollande decides to fire Ayrault. Changes are especially expected in the Finance Ministry.