Marching under banners reading "Neither cuts nor privatizations," many protesters were civil servants hit with a wage freeze next year.
Spain is experiencing its second recession in three years, is burdened with an unemployment rate of nearly 25 percent and social unrest is on the rise. The number of people registered unemployed rose to 4.71 million in September as the tourism season ended and businesses let workers go.
"I work in a hospital, but I'm about to end up unemployed," 58-year-old nurse Victoria Gutierrez said. "On Oct. 30, my temporary contract will finish and it won't be extended.
"We have minimum cover on every floor at every hospital," she said. "This is affecting not just hospitals, also education and civil services, everything."
The government has pushed through nine straight months of tough austerity measures which have prompted Spain's 17 regional governments, some of which are heavily indebted, to slash spending in health care and education.