Chrysler axes 5,000 jobs amid merger talks with GM

Amidst merger talks with General Motors, Chrysler has told its employees that it would lay-off 5,000 of its salaried and contract work force beginning next month over and above the 29,000 job cuts already announced over the past two years.

To soften the blow the automaker said it would offer buyouts and early retirement packages in the next two weeks even as the plans to make more restructuring announcements soon.

These announcements came when talks had intensified between the two sides and a GM takeover of Chrysler was seen as more favorable than the Chrysler's mooted deal with the Renault-Nissan group on a limited partnership.

Chrysler employs about 66,000 people globally out of which 33,000 are hourly workers and 15,871 salaried workers in the US.

The 5,000 employees who are likely to lose their jobs comprise 25 per cent of its salaried workforce and include engineers, accountants and finance personnel. The company will also be offering early retirement and buyout packages to its 17,300 salaried employees and an undisclosed number of contract workers.

Vice chairman and president, Tom LaSorda said that sales projections for the rest of this year and 2009 look bleak and indicated that the company would be closing more factories.