GM cutting 1,600 U.S. salaried positions

General Motors Corp said on Monday it is telling about 1,600 salaried U.S. employees this week to leave by May 1 as it scrambles to reduce costs under a restructuring mandated by the U.S. government.

The reductions are part of GM's plan to slash its global salaried work force this year by about 10,000, or 14 percent. GM also aims to cut 37,000 hourly jobs worldwide by the end of the year.

GM, which has been surviving on $13.4 billion of government loans since the beginning of the year, has until June 1 to prepare deep cuts in debt, labor costs, dealership network and brands to prove that it can return to profitability. The Obama administration has said the alternative would be bankruptcy.

The cuts add to the thousands lost in the downturn for U.S. automakers that began in 2005 and has driven both GM and Chrysler LLC to the brink of failure with the added weight of the recession.

Chrysler LLC, which also received $4 billion in government loans and is seeking an additional $3 billion, is currently offering buyouts to its U.S. hourly work force after cutting more than 8,000 salaried jobs in 2008.

GM, Ford Motor Co and Chrysler have shed more than 140,000 jobs since 2005 and almost half of their workforce since the start of the decade.

GM North American President Troy Clarke said in an email to employees that the cuts were needed to ensure GM's long-term viability. The 1,600 employees will be separated effective May 1, GM said.

U.S. auto sales tumbled 38 percent to the lowest level in nearly three decades in the first three months of 2009, under the pressure of tight credit and low consumer confidence. GM's U.S. sales plunged 49 percent in the same period.

GM's shares were off 19 cents, or 10 percent, at $1.67 IN afternoon trading on the New York Stock Exchange.

(Reporting by Soyoung Kim, editing by Tim Dobbyn)