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The company also said it would reduce its contracted workers, but it did not give a target number for that reduction, The Detroit News reported Thursday.

In total, the company has shrunk by 28,000 hourly and salaried positions in about 18 months, the News reported.

The job cuts are "in response to the continued deterioration in the U.S. automotive market", Chrysler executive vice president for human resources and communications Nancy Rae wrote in a memo to employees.

Chrysler sales dropped 22 percent from January to the end of June, against an industry average drop of 10 percent, the News reported.

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