Stellantis is cutting 150 employees from the work force at its assembly plant in Belvidere, Ill., where the Jeep Cherokee is produced.
The layoffs are part of efforts to rebalance staffing levels and realign production "to meet global demand" for the Jeep Cherokee, according to the company.
Stellantis is the corporate parent created by the merger of Fiat Chrysler Automobiles and France's PSA Group.
"Following a review of its operations, 150 people will be indefinitely laid off, starting Feb. 20, 2021," a Stellantis spokeswoman said in a statement. "The company will make every effort to place indefinitely laid-off hourly employees in open full-time positions as they become available based on seniority."
Jeep Cherokee production at Belvidere was idled from Feb. 8 to 15 because of the global microchip shortage.
U.S. sales of the Cherokee slipped 10 percent in the fourth quarter to 37,936 vehicles. Stellantis' total U.S. sales for the quarter declined 8 percent while industrywide deliveries fell 2.4 percent.
Stellantis said most of the fourth-quarter decline was a result of a sharp drop in fleet orders, especially those from rental car companies dealing with a pandemic-induced dip in business travel.
The Detroit Free Press reported on the layoffs on Tuesday.