Supercar manufacturer and Formula One team operator McLaren Group has announced plans to reduce its workforce as part of its major restructuring program to cope with the economic downturn caused by the coronavirus pandemic. The British company announced on Tuesday that it may be cutting up to 1,200 jobs in the coming weeks to reduce its overhead costs.
McLaren mentioned in a statement that the job cuts will mostly affect workers at its applied technology, racing, and automotive business. The company explained that the global shelter-in-place orders, lockdowns, shutdown of its manufacturing plants, and cancellation of motorsports events have greatly affected its ability to generate revenue.
In order to cope with the unprecedented changes, the company has had to formulate a viable plan to stop it from hemorrhaging any more money. McLaren's executive chairman, Paul Walsh, had stated that the course of action that it will need to undertake is unfortunately hard to avoid.
While it doesn't really want to let go of its employees, it will have to do so in order to ensure its survival. Walsh added that they have already implemented dramatic cost-saving measures across all of its businesses and cutting jobs was its last resort. Earlier in the month, reports citing sources with knowledge in the matter revealed that McLaren was seeking to raise money through loans against its collection of race cars and other assets.
According to local media reports, McLaren currently has around 4,000 employees. This means that the latest round of job cuts will reduce its workforce by more than a quarter. The company, which is majority-owned by Bahrain's sovereign wealth fund Mumtalakat, already furloughed some of its workers under its Formula One program back in April.
With the suspension of motorsports events, the company was forced to furlough more than 90 percent of its Formula One team. McLaren employed around 800 people as part of its Formula One program. That number is expected to be reduced to only a crew of around 70, most of which will be maintaining the company's race cars and equipment.
McLaren was the first Formula One team to furlough its crew members due to the coronavirus pandemic. Organizers of the popular motorsports event have announced that they may be imposing a $145 million budget cap during next year's season. The purpose of the budget cap is to ensure the survival of the other 10 Formula One teams, who may not have much of a budget coming out of the economic crisis. McLaren is currently the second-most successful Formula One team in the sport's history, right behind Ferrari.
