Still more cuts are coming at Chrysler, raising mounting concerns about the automaker’s long-term ability to meet mounting pressures in the highly-competitive marketplace.
The latest cutbacks affect 400 technology workers, mostly at the company’s headquarters, according to published reports. Currently, there are 2,100 such employees in the Detroit suburb of Auburn Hills. The job cuts will begin immediately, though some employees will remain on the job until the third quarter of 2008.
The jobs are being outsourced, some to Virginia-based Computer Sciences Corp., the rest to Indian-based Tata Consultancy Services, a subsidiary of the sub-continent conglomerate that recently announced plans to purchase the Jaguar and Land Rover brands from ford Motor Co.
Company officials say the move will free up money needed for other operations. The contracts for the tech work being outsourced are worth hundreds of millions of dollars.
Chrysler has been wielding a sharp knife since it announced a major cost-cutting program, in February 2007. Then owned by Daimler-Chrysler AG, the original plan was to eliminate 13,000 jobs. In November, following the sale of Chrysler to equity giant Cerberus Capital Management, the automaker said it would cut another 12,000 jobs. Since then, still more job cuts have been planned, along with a sharp reduction in production.
Ironically, Chrysler’s newest announcement comes the same week as Toyota announced plans to greatly increase its own technical presence in the Detroit area.