McLaren Group restructure leads to around 1,200 redundancies
The McLaren Group is making around 1,200 employees redundant, amounting to more than a quarter of the Surrey-based company’s 4,000 workforce, as part of a restructure. This is its response to the impact of coronavirus pandemic and the implementation of a budget cap in Formula 1 from 2021 onwards. The group has already furloughed a significant number of its employees as the Formula 1 season and sales of supercars came to a halt amid the spread of Covid-19.
On 26 May, McLaren said in a statement: “Due to the ongoing impact of the Covid-19 pandemic, as well as the new Formula 1 cost cap to be introduced for the 2021 season (see separate story), luxury automotive, motorsport and technology company McLaren Group has commenced a proposed restructure programme as part of a wider business plan to ensure its long-term future success.
“Subject to employee consultation, the proposed restructure is expected to result in around 1,200 redundancies across the Group’s Applied, Automotive, and Racing businesses, as well as support and back office functions.”
Regarding the figure of around 1,200, it is understood approximately 70 of those will be from the Formula 1 side of the business, but discussions are ongoing and details are yet to be finalised.
“We deeply regret the impact that this restructure will have on all our people, but especially those whose jobs may be affected,” said Paul Walsh, the executive chairman of McLaren Group. “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.”
The cuts, first reported by Sky News, come as the group seeks to raise £275m from investors, the amount is has spent in the year to 20 April production at its Woking plant suspended since March. While the group’s existing shareholders pledged £300m of equity investment in March, it reportedly failed in its request for a £150m emergency loan from the government.
“This is undoubtedly a challenging time for our company, and particularly our people,” Walsh said, “but we plan to emerge as an efficient, sustainable business with a clear course for returning to growth.”