Chrysler chairman and CEO Bob Nardelli on Friday told employees by letter the automaker would cut additional salaried and supplemental workers beginning next month.

An official announcement contained no numbers and Chrysler spokesmen could not be reached immediately for comment but Detroit newspapers – one of which cited state officials briefed on the matter – and a just-auto source said Chrysler was making a 25% cut – 5,000 jobs.

“These are truly unimaginable times for our industry,” Nardelli said in a statement.

“We continue to be in the most difficult economic period most of us can remember. The combination of troubled financial markets, difficult credit, volatile commodity prices, the housing crisis and declining consumer confidence continues to weigh on the economy.

“Never before have auto industry sales contracted at such a fast rate. 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 organisation to become as competitive as possible.”

Nardelli said the cuts are on top of those previously announced and would be accomplished through “socially responsible” programmes, including voluntary retirements and salaried employee buyouts.

“These new programmes will feature enhanced benefits, including both cash and new vehicle vouchers.”

Salaeried workers will receive details of the programmes over the next two weeks, Chrysler added, and they will depart by the end of December.

Chrysler also told employees today it would “more diligently control spending by cutting back on all discretionary and overhead expenses and reduce capital expenditures not connected to major product programmes”.

Chrysler would make additional organisational and restructuring announcements in the near future as the it “works to find new ways to operate”, the statement said.

Earlier, a Detroit-based supplier’s CEO told the Wall Street Journal (WSJ) that Chrysler had been cancelling or delaying products that were intended to be launched in the next two to three years.

“Everything seems to be up in the air right now,” the executive said. But a Chrysler spokeswoman told the WSJ the company had not cut its product development programmes, something which its statement on the job cuts – and Nardelli’s letter to employees – reiterates.

The WSJ report also said Chrysler private equity owner Cerberus Capital Management wanted to retain a stake and a say in management and board appointments in any combination of the automaker with General Motors.

Cerberus is also considering other options for Chrysler, the report added.