McLaren retrenches 1,200 staff from across the group
The cancellation of motorsport events, the suspension of manufacturing and retail activities around the world and reduced demand for technology solutions due to COVID-19 has forced the McLaren Group to cut their workforce across their business group.
This involves a total of 1,200 professionals in their applied, motorsports and automotive manufacturer sections. From the McLaren F1 team alone there will be 70 staff made redundant. The job cuts represent more than a quarter of the group’s workforce which is about 4,000 people. McLaren Group is majority owned by Bahrain’s sovereign wealth fund Mumtalakat and it looks like the oil rich nation has it own set of financial issues to cope with before bailing out their investments.
This above news is not surprising as the McLaren Group made a £150m loan request to the British government and it did not happen.
McLaren was also the first Formula One team to furlough staff in April this year as races got cancelled. The team has about 800 people, which is expected to be reduced to just 70.
So, for some Malaysians, the question will be, will this affect their new McLaren sports car delivery date? Well, they will need to contact the Malaysian dealer to get confirmation on this. For now, it seems their car deliveries are just a few months behind and this is because of the forced shutdown of the borders, supply chain of parts and the factory.
PRESS RELEASE: 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, 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.
Like many other businesses, McLaren has been severely affected by the current pandemic. The cancellation of motorsport events, the suspension of manufacturing and retail activities around the world and reduced demand for technology solutions have all led to a sudden impact on the Group’s revenue generating activities.
“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.”
“This is undoubtedly a challenging time for our company, and particularly our people, but we plan to emerge as an efficient, sustainable business with a clear course for returning to growth,” said Paul Walsh, Executive Chairman, McLaren Group.
“McLaren Applied has also already refocused to strategically prioritise proven, high-growth revenue streams,” he said.
On the Automotive side of the business, McLaren is due to start the first deliveries to customers of the 765LT supercar in October as well as its ultra-exclusive open-top speedster, the McLaren Elva, towards the end of the year.
“We have already invested in developing a new lightweight, hybrid vehicle architecture that will commence series production at the end of this year with the first deliveries to customers now due in early 2021.”
“McLaren Racing has been a proponent of the introduction in 2021 of the new Formula 1 budget cap which will create a sustainable financial basis for the teams and lead to a more competitive sport,” said Mr Walsh.
He continued: “While this will have a significant impact on the shape and size of our F1 team, we will now begin to take the necessary measures to be ready to run at the cap from 2021 onwards, in order to challenge again for race wins and championships in the future.”
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