McLaren will lay off 1,200 employees, including in F1
Faced with the health crisis that has become economic, McLaren must react. This will result in the loss of 1,200 jobs, or 25% of its workforce. The F1 division will also be affected due to budget caps.
As lockdown measures are being eased around the world, the time for reckoning is approaching. What began as a health crisis is turning into a large-scale economic crisis. The automotive industry is one of the hardest hit markets, from low cost to premium.
While McLaren had been growing in recent years, with the launch of an increasingly complete range of supercars, the brand has been abruptly halted. Although it benefited from the furlough scheme implemented by the British government, which covered 80% of employees’ net salaries, more drastic measures are now going to be implemented.
This is how McLaren announced today “based on consultation with employee representatives, the proposed restructuring is expected to result in 1,200 layoffs across the group, within its external applications, automotive, and racing divisions, as well as within the group’s support functions.” Of course, the automotive production part will bear the brunt of these cuts, but F1 will not be spared. It is said that 70 employees will not be retained.
In this context, one can understand why Zak Brown has been a strong advocate for the implementation of a budget cap starting next season, which he hopes will give the team the opportunity to compete on equal terms with the three leading teams. Paul Walsh, who became executive chairman last March, stated: « Even though this will have a significant impact on the operation and size of our F1 team, we will now put in place the necessary measures to be ready to operate at the budget cap from 2021 onwards in order to fight for wins and championships in the future. »
Over the past two fiscal years, the competition branch posted a deficit of 75 and 108 million euros in 2019 and 2018 while the automotive branch was significantly profitable. It can be noted that the F1 program was mentioned, unlike its new IndyCar program. However, despite positive statements about the new regulations in WEC, it is unlikely that the brand will venture into a new category while the focus is on cost-saving.
With the participation of www.racingbusiness.fr
