More than 130,000 employees at General Motors' US dealerships are set to lose their jobs over the next 18 months as the beleaguered carmaker implements plans to shrink its distribution network.

The plan, which involves culling 2,600 outlets, could cause heavy job losses at a swath of local dealership suppliers, from advertising agencies to cleaning services, according to the National Association of Automobile Dealers, which expressed "a strong sense of disappointment" at GM's decision.