Staff cuts and fund-raising to keep McLaren buoyant

McLAREN Group has become the first Formula One owner to announce a massive job cut of 1200 staff as it attempts to weather the impact of COVID-19.

The supercar maker and F1 team owner said the job cuts represented more than a quarter of its workforce with the sackings to be spread across the F1 team, car manufacturing and applied-technologies operations.

The company is also raising funds to keep the business afloat during the pandemic and seeking $A510 million from investors, using its headquarters and its prized classic-car collection as surety.

McLaren blamed the job losses on the cancellation of F1 events – slashing sponsorship income –, suspension of car-making and subsequent sales with reduced demand for its technologies.

The first 10 F1 races for the current season have been cancelled or postponed while the start of the IndyCar season has also been delayed.

Its F1 program, which takes on new team driver Daniel Ricciardo next season, contributes 12 per cent to the group’s revenue through advertising and prize money. It is expected to lose 70 of its 800 employees under the job cuts.

McLaren has already furloughed many staff as a result of COVID-19. This allows the company to claim from the government up to 80 per cent of furloughed staff wages, up to a maximum of the equivalent of $4600 a month.

In a statement, McLaren Group executive chairman Paul Walsh said: “We deeply regret the impact that this restructure will have on all our people, but especially those whose jobs may be affected”.

“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 pandemic has caused McLaren to report outgoings of $476 million in the four months to April this year as it shores up the lack of F1 income and the suspended car production.

The company is expected to begin delivery of its new $600,000 765LT model in October and plans to launch its $2.6 million Elva roadster before starting production of its new hybrid-vehicle architecture at the end of the year.