Chrysler Job Cuts: 5,000 Laid Off

Chrysler LLC plans to reduce its white-collar workforce by 25% by the end of the year, the company said in an announcement Friday.

The cuts, about 5,000 workers in total, will come from Chrysler's salaried and supplemental workforce. Chrysler has about 18,500 white-collar workers.

Salaried workers, which will will make up a majority of the job cuts, will be offered buyouts and early retirement packages, said Chrysler spokesman David Elshoff. Supplemental workers, employees of outside contractors who work at Chrysler, will not be offered packages, he said, but those workers make up only a small number of the cuts.

Details of the offers will be explained to employees over the course of the next two weeks and employees will have until the end of November to decide if they wish to accept the offer.

If not enough employees accept the offers, the company will begin involuntary layoffs through December.

The company did not say how much money it expects to save through this program.

"These are truly unimaginable times for our industry," said Chrysler CEO Bob Nardelli in a company announcement. "We continue to be in the most difficult economic period most of us can remember."

"Never before have auto industry sales contracted at such a fast rate," Nardelli added. "Throughout this challenging time for our industry and our company, we have continued to face the realities of our business environment, and working as a team, we have been right-sizing our organization to become as competitive as possible."

These latest job cuts will affect only white-collar, non-union workers.

The company announced Thursday that it would eliminate one shift at a Toledo, Ohio, Jeep plant and accelerate the closing of its SUV factory in Newark, Del. Those moves will reduce Chrysler's payroll by about 1,825 jobs.

The Newark plant had originally been scheduled to close by the end of 2009. It is the only factory building the Dodge Durango and Chrysler Aspen full-size SUVs.

In Friday's job-cut announcement, the company also said it would make other cost cutting moves in the near future.

Chrysler, which is privately owned by Cerberus Capital Management, has reportedly been in talks with General Motors (GM, Fortune 500) about a possible buyout or merger. The company has also reportedly been in talks with Nissan (NSANY) and Renault about joining their cross-ownership alliance.