McLaren Poised to Cut 1,200 Jobs

Matt Posky
by Matt Posky

McLaren says circumstances have encouraged it to get fairly aggressive in its restructuring efforts. Coronavirus lockdowns forced the company, like so many others, to postpone production and forego sales.

While an undesirable scenario for any manufacturer, McLaren Group already faced additional headwinds by being a relatively small manufacturer dependent on low-volume specialty products with astronomical price tags and having its racing program kneecapped the Fédération Internationale de l’Automobile (FIA).

In early May, the sanctioning body of Formula 1 announced the $175-million proposed budget cap for teams would now be just $145 million. The FIA and World Motor Sport Council is under the impression that the series cannot survive as is — races have become fairly predictable and events are losing spectators both in the stands and at home. While the cap doesn’t influence marketing budgets or how much dough one can use to tempt the world’s greatest drivers, it’s supposed to keep the cars themselves more equal and give some of the smaller outfits a fighting chance.

With the pandemic also nuking this year’s F1 season and the budgets of businesses around the world, the FIA also thinks reducing costs is a good idea in general.

“The initial objectives [of the budget cap] were a more competitive field and I think with the situation we have now, economic sustainability is the priority, and I think that counts as much for the big teams as it does for the small teams,” explained Managing Director of F1 Ross Braw (OBE) earlier this month.

For McLaren, the arrangement seemed agreeable. As a solid mid-tier contender with the ability to surprise, its team clearly thought it could do more with the money than Ferrari or Mercedes in F1. However, it also expressed a need to cut costs. McLaren was the first F1 team to furlough staff when the pandemic finally became a serious issue and has sought business loans through the UK government.

According to reports from Sky News, about 1,200 people will be let go due to cost-cutting, with an estimated 70 coming directly from the F1 team. That’s about one-quarter of McLaren’s staff.

“We deeply regret the impact that this restructure will have on all our people, but especially those whose jobs may be affected,” said Executive Chairman Paul Walsh. “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 now have no other choice but to reduce the size of our workforce.”

[Images: Formula 1; McLaren Group]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • SCE to AUX SCE to AUX on May 26, 2020

    I'm surprised McLaren even has 1200 jobs to cut. A 25% whack is a bad omen; the other 75% shouldn't feel safe.

  • EBFlex EBFlex on May 26, 2020

    It’s a shame that all the fake panic around a virus that the CDC has officially stated has a .004% mortality rate is causing all this trouble. Can’t wait for flu season when they do all this nonsense again. Or will we have learned our lesson and not overreact this time?

    • Conundrum Conundrum on May 28, 2020

      Yeah, they'll be firing all the epidemiologists and come looking for you to take over and run things the way God and Trump intended. Why bother with knowledge and training when some overweight guy winched out of a random basement with a Rent-a-Crane could do a better job? Reminds me of all the engine geniuses trapped in other basements, whose only outlet has been to write into forums like this one and tell those damn engineers how to design a real engine. It was ever thus - getting discovered by a Mr Moneybags has always been the problem. So genius grocery shelf stockers are left to shake their fists futilely at the world wondering how come life's been so darn unfair.

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