McLaren cite F1 budget cap and coronavirus for cutting 1,200 jobs

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McLaren has announced job cuts of 1,200 staff in response to Formula 1's new budget cap and the coronavirus.

The Woking-based company has been working hard to financially secure its future amid the Covid-19 crisis by raising 300m from investors back in March and is set to raise a similar amount from a bond issue secured against its heritage car collection and MTC base.

Staff have also been furloughed since operations stopped back in March, while some road car projects have been delayed.

Still, this hasn't been enough for McLaren to prevent taking the axe to over a quarter of its workforce across all three divisions: Racing, Automotive and Applied Technologies.

"It is a course of action we have worked hard to avoid, having already undertaken dramatic cost-saving measures across all areas of the business. But we have no other choice but to reduce the size of our workforce," executive chairman of the McLaren Group, Paul Walsh said.

"This is undoubtedly a challenging time for our company, and particularly our people, but we plan to emerge as an efficient, sustainable business with a clear course for returning to growth [after the coronavirus]."

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Interestingly, however, it has also been confirmed some of the downsizing is in response to F1's new $145m budget cap which will come into effect next year and is $30m less than originally planned.

"McLaren Racing has been a proponent of the introduction in 2021 of the new Formula 1 budget cap, which will create a sustainable financial basis for the teams and lead to a more competitive sport," Walsh noted.

"While this will have a significant impact on the shape and size of our F1 team, we will now begin to take the necessary measures to be ready to run at the cap from 2021 onwards, in order to challenge again for race wins and championships in the future."