President François Hollande had tasked Valls with putting together a "combative" government that will lead France into a "new chapter" after the Socialist party suffered a raft of humiliating defeats in last weekend's local elections.
Valls had just over a day to put together his new team of ministers, which did not incude any members of the Greens, after they refused to serve under him. The new cabinet is a slimmed down version of the previous 38-strong government and includes only 16 ministers - eight men and eight women - which is the smallest goverment since 1958.
While some ministers like Laurent Fabius, who has been in charge of foreign affairs, kept their jobs, Valls government contained some new faces.
Notably Ségolène Royal, 60, the ex-partner of the president and former presidential candidate who lost out to Nicolas Sarkozy in the 2007 race, who was named France's Minister of Environment.
As a Socialist Party stalwart, Royal was unlucky not have been named in Hollande's first government after he was elected in 2012, but reports claim that his then partner Valerie Trierweiler vetoed the appointment of the mother of Hollande's four children.
With Hollande having since dumped Trierweiler after news of his secret fling with French actress Julie Gayet was exposed by Closer magazine earlier this year, the path appears to have cleared for her to be brought back in from the cold.
She is still close to the president and would give him a muche needed ally in the government. Asked recently if she had considered quitting public life, Royal replied: "Never. After 30 years in politics, that would be unthinkable."
In the reshuffle Defence Minister Jean-Yves Le Drian also kept his post, but the former finance minister Pierre Moscovici was removed and his position split in two, with former Labour Minister Michel Sapin becoming Finance Minister. Sapin is a close Hollande ally and a supporter of budgetary rigour.
The outspoken Minister for Industrial Renewals Arnaud Montebourg becomes Minister for the Economy, which will incorporate his previous portfolio. Montebourg has been criticised for being anti-business and is famed for his run-ins with American CEO Maurice Taylor after he ridiculed French workers for being lazy.
Significantly Christiane Taubira, who has had a few run-ins with Valls, kept her job as Justice Minister.
There has been a change of Education Minister with Benoît Hamon replacing the unpopular Vincent Peillon and Bernard Caseneuve has been tasked with the job of replacing Valls as Interior Minister.
Najat Vallaud-Belkacem, the current Minister of Women’s Rights has had her portfolio increased to cover Youth and Sports.
Replacing Cecile Duflot, the former housing minister who refused to serve under Valls, is Sylvia Pinel. Stephane Le Foll keeps his job as Agriculture Minister.
Government has tough task
Valls has to deal with "an economic context that has deteriorated sharply", said Frederic Dabi of the Ifop polling institute, with unemployment and a public deficit that remain stubbornly high after 22 months of Socialist rule.
Growth, meanwhile, is almost non-existent and the exasperation of the French was reflected in Sunday's municipal polls that saw the Socialists lose a whopping 155 towns and cities to the main opposition and far right.
In a televised address on Monday, Hollande tasked Valls with implementing a package of pro-business policies known as the Responsibility Pact, which cuts taxes on firms that are widely viewed as hampering employment and growth, and imposes spending cuts of €50 billion ($69 billion).
He also asked him to set in motion a new "Solidarity Pact" that would include steps to boost spending on education and health and reduce personal income taxes.