The group's Smart car has failed to make money since its launch

The carmaker will lose a fifth of its accounting, personnel and strategic planning staff worldwide.

It is the latest firm to cut its workforce and reduce costs in a very competitive global car market.

On Monday, Ford said it was shedding 25-30,000 manufacturing jobs in its North American operations.

New boss

DaimlerChrysler's Mercedes division is already in the process of eliminating 8,500 workers as it looks to improve its margins.

The management restructuring is the first major strategic decision taken by DaimlerChrysler's new chief executive, Dieter Zetsche, who took the helm at the company at the beginning of January.

Mr Zetsche was credited with turning around the fortunes of Chrysler in the US where he cut tens of thousands of jobs, closed a number of factories and lowered costs by $8bn.

"Our objective in taking these actions is to create a lean, agile structure, with streamlined and stable processes that will unleash DaimlerChrysler's full potential," said Mr Zetsche.

Dieter Zetsche took the helm at DaimlerChrysler in January

The company's shares rose 4% to 44.35 euros on the Frankfurt stock exchange.

New head office

Other management changes announced by Mr Zetsche will see the number of DaimlerChrysler board members reduced from 12 to nine and the company move its head office to a new site in Stuttgart, closer to production.

Mr Zetsche said the new management structure would enable the group's car divisions to collaborate more closely in areas such as hybrid petrol-electric cars.

DaimlerChrysler reported a 3.8% rise in global car sales in 2005, with increases for both its Chrysler and Mercedes-Benz divisions.

The German-US group saw sales pass four million cars for the first time.

It is the world's fifth-biggest carmaker and employs about 160,000 people in Germany and almost 385,000 workers worldwide.