By on May 26, 2020

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]

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8 Comments on “McLaren Poised to Cut 1,200 Jobs...”


  • avatar
    FreedMike

    I’d never watched much F1 until I found the “Drive To Survive” series on Netflix, and I was hooked, after a fashion.

    Love the action – compared to something like NASCAR, it’s a total rush to watch. But even a cursory sampling of this sport shows it’s a lot like big-league baseball – there are a couple of mega-market teams that can just spend their way to title shots, a few other teams that are consistently good enough to challenge the big spenders when their seasons go sideways, some mid-range teams that can compete but won’t ever contend, and a ton of perennial also-rans, most of which are in small markets.

    Seems to me a bit of NFL-style payroll parity might do this sport some good.

    • 0 avatar
      A Scientist

      Netflix’s show got me more into F1 as well, and made me super psyched to follow a season. However, I lost a lot of interest in it pretty quickly because of exactly what you wrote here. Most of the races are parade routes. In fact, I’m pretty sure I’ve seen less predictability and more overtakes in actual parades. When Saturday qualifying has more drama and excitement than the race itself, that’s a problem. Even this year’s “Drive to Survive” did everything they possibly could to hide the fact that Hamilton/Mercedes basically won EVERYTHING the previous season. I’m not giving up on it completely yet. Apparently F1 is proposing spending caps after the 2021 season. Maybe that will mix things up a bit.

    • 0 avatar
      ToolGuy

      FreedMike, thank you for the recommendation – I enjoyed that.

      If your Netflix queue is running low, check out “Boys of Bonneville: Racing on a Ribbon of Salt” on Amazon Prime. (Without giving too much away, old guys can be fast too.)

      Ctrl F to find “Jenkins” in this list [note his age at the time the records were established, and note that he drove alone]:
      https://www.fia.com/fr/file/51532/download?token=H6mgp9u4

  • avatar
    redapple

    F 1
    ?

    Could not care less.
    Same winners.
    Stupid rules like
    drag reduction zone, only certain place on track only of the guy behind you is closer than and so forth.
    no refueling
    but yes you must pit to use a 2nd different tire compound.
    cool historic tracks dont get a race but skank hole fiefdoms do.

    F 1 can f*** Off.

  • avatar
    bobbysirhan

    F1 has had many a stupid rule package through the decades, going back to the 1961 move to a 1.5 liter engine capacity limit. Those cars were visibly slow on the long straightaways of the day’s tracks. At least the racing was real. Recently, they’ve added gimmicks borrowed from Formula Palmer Audi and IndyCar combined with managed competition like NASCAR. I don’t even care if there are dominant teams and drivers, but I care when their dominance comes down to rules designed to protect the status quo by punishing teams that struggle doubly for trying to improve. Tire games, passing aides and ‘virtual safety car’ v. arbitrary safety car are also turn offs for fans of legitimate competition.

    The budget cap is unnecessary and the final cut of death by a thousand. Unlimited resource teams will only be that much more dominant because of their superior computer simulations. The loss of prestige of being glorified claimer cars will hurt audiences further, and that will reduce the money available to compete. Why have a budget cap? The amount people spend to win is an indication of the value of the prize. If top teams spend a billion a year, it is because the audience is strong and the series is respected. Maybe someone will start another racing series that will instantly gain recognition as the premier racing series in the world. Or maybe racing is a leftover of an era when people weren’t complete cowards.

  • avatar
    SCE to AUX

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

  • avatar
    EBFlex

    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?

    https://www.cdc.gov/coronavirus/2019-ncov/hcp/planning-scenarios-h.pdf

    • 0 avatar
      conundrum

      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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