The cuts are about 6 percent of Chrysler's U.S. hourly work force of 33,000.
The Toledo factory makes the Dodge Nitro and Jeep Liberty. Both have been selling slowly this year due to high gas prices and a slowing U.S. economy.
The Newark plant makes the slow-selling Dodge Durango and Chrysler Aspen sport utility vehicles. It originally was expected to close at the end of 2009.
Auburn Hills, Mich.-based Chrysler said in a statement that the changes will adjust inventory to better match consumer demand. Through the first nine months of the year, the company's U.S. sales have fallen 25 percent from the same period last year, the largest decline of any major automaker.
"The markets are facing unprecedented turmoil and we are in a time of historic change in the auto industry," said, Frank Ewasyshyn, Chrysler's executive vice president of manufacturing. "These tough, but necessary steps are vital to our long-term viability."
The privately held company said it would work with the United Auto Workers union to handle the layoffs in a "socially responsible manner."
The company in the past has offered buyout and early retirement programs to workers affected by plant slowdowns and closures. Chrysler spokesman Ed Saenz said the Toledo North plant now is operating on two shifts. It has a total of 2,100 employees, 1,800 of whom are blue-collar.
Neither of its vehicles is selling well. Through September, Chrysler has sold 30,071 Nitros this year - 46 percent fewer than a year ago. Liberty sales of 54,293 are off 21 percent, according to Autodata Corp.
The second shift at the Toledo assembly plant will be eliminated, said Jeep UAW leader Dan Henneman. "We pretty much knew it was coming," he said. "The orders since June have drastically gone down."
Just two years ago, about 750 jobs were added at the plant as production began on the Nitro. But the sport utility vehicle never took off, and Chrysler eliminated the third shift at the Toledo North assembly plant last November.
"We started this year with 4,000 employees and we're going to end it with 1,700," Henneman said. "But I don't think the blame is on management or how they run their business. It's not a Jeep issue. It's not a Chrysler issue. It's the whole industry."
The Newark plant has been running on one shift since July 2006, and the company announced its intent to shut the factory down in February 2007. The 1,000 workers at the Newark plant had just returned to work Monday following a three-week layoff to scale back production.
Thursday was the deadline for Chrysler to give notice to workers if it planned to close the plant this year, said Richard McDonaugh Jr., who retired from the plant last year and stepped down as president of UAW Local 1183 earlier this year.
"We assumed that something was going to happen sooner than December 2009, but nobody was sure," McDonaugh said. "We knew the possibility was there."
Chrysler sold 17,339 Durangos through September, down 54 percent from sales for the first nine months of last year. Aspen sales dropped 21 percent to 17,681.
The company said Newark is the only place making Durangos and Aspens, both large truck-based SUVs that have fallen out of favor with customers due to high gasoline prices. But spokesmen would not say if the SUVs would be built elsewhere or the products would be eliminated.
"We don't talk about future product plans before they are announced," Saenz said.
Stuart Schorr, another Chrysler spokesman, said the company announced a $1.8 billion investment in its Jefferson North Assembly Plant in Detroit that will give it the flexibility to build a family of SUVs starting in 2010. The plant now builds the Jeep Grand Cherokee and Commander SUVs.
The company, Schorr said, is happy with sales of hybrid gas-electric Aspens and Durangos, and it would be premature to speculate on the vehicles' demise.
Chrysler has said a new version of the Grand Cherokee will be based on car-like underpinnings and be more fuel-efficient than the current body-on-frame truck-based vehicle.
General Motors Corp. has decided to close a plant in Moraine, Ohio, that makes the GMC Envoy, Chevrolet Trailblazer and Saab 9-7X midsize SUVs, and the company will no longer make those truck-based vehicles.
Associated Press writer John Seewer in Toledo, Ohio, and AP Business Writer Randall Chase in Newark, Del., contributed to this report.