McLaren to cut 1,200 jobs as virus hits demand

Ross Houston
May 28, 2020

The coronavirus affects many companies and auto manufacturers are no exception to the rule.

The company, which says it's a major employer in the south east and Sheffield, now has a workforce of about 4,000 people who have already taken wage cuts or been put on furlough due to the coronavirus crisis. "We must now do everything possible to meet the budget cap and eventually win races again", concludes Walsh.

McLaren Group are to cut more than one thousand jobs from its workforce of four thousand amid the coronavirus pandemic. "But we have no other choice but to reduce the size of our workforce", executive chairman of the McLaren Group, Paul Walsh said.

The budget cap in Formula 1 then comes at the right time for McLaren. "The budget cap in F1 will ensure a more sustainable future for the sport and that has a significant impact on our F1 team".

The firm, which was set up by racing driver Bruce McLaren in 1963, blames the cuts on the cancellation of motorsport events, the suspension of manufacturing and sales activities, and a drop in demand for technology solutions.

While the campaign is scheduled to resume in Austria on July 5, McLaren must also adapt to the cost cap that arrives from next year, limiting each team to a maximum annual spend of £118 million, which will dwindle further over subsequent seasons.

McLaren was one of the only teams in Formula 1 to report COVID-19 cases within the paddock as they withdrew from the Australian Grand Prix due to a member of the team contracting the virus.

The company, controlled by sovereign wealth fund Bahrain Mumtalakat Holding Co., has had to halt production on account of the coronavirus pandemic, which has also delayed the Formula 1 racing series.

Some manufacturers have been hit harder than others, and it would seem McLaren falls into the former category.

The company, which is majority owned by the Bahrain government, had requested an emergency loan of 150 million British pounds (approximately $185 million) from the British government but was knocked back, Sky News reported in May.

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