AMR Corp, the bankrupt parent of American Airlines, may slash between 12,000 and 14,000 jobs as part of a bankruptcy cost-cutting strategy the carrier says is necessary to compete with rivals.

Sources familiar with American's plan said the job cuts detailed by executives in a meeting with labor groups on Wednesday would be part of an overall effort to reduce operating expenses by more than $2 billion annually.

We will end this journey with many fewer people, AMR Chief Executive Tom Horton told the unions, according to someone who was at the meeting.

Horton also said the airline intends to emerge as an independent company, according to one of the sources who attended the meeting with the unions.

American has said it suffers from higher labor costs than its peers and filed for Chapter 11 protection from creditors in November.

Horton said in a letter to employees that the carrier was aiming for $2 billion in overall annual cost reductions, including $1.25 billion in employee-related expenses. American also plans on restructuring debt and leases as well as grounding older planes.

Total employee-related costs will be reduced by roughly 20 percent across the board, including management.

American also wants to generate $1 billion per year in new revenue through changes in its network, fleet utilization and product improvements.

Horton did not touch on the possibility of slashing employee pension plans, which the U.S. government expects the company to try to do during bankruptcy.

(Reporting By Kyle Peterson; Editing by Mark Porter and Maureen Bavdek)

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