McLaren left with "no other choice" but to axe 1200 staff

McLaren is to make around 1,200 staff redundant across the Group due to the impact of the current pandemic crisis.

The cuts across the company's three divisions - Racing, Automotive and Applied - are being undertaken despite the fact numerous measures had been in place to prevent such a course of action.

A McLaren statement read: "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."

The loss of the 1200 staff represents a 30% cut from its current 4000 workforce. It is understood there will be around 70 job losses within McLaren Racing.

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.

"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."

F1 is to introduce a budget cap of $145million from next year - that will be reduced further over the following seasons - a sizeable reduction from the originally agreed figure of $175million.

McLaren, however, was a strong advocate of reducing the figure further, aiming for a $100million cap.

Walsh hopes that despite the higher cap than had been targeted, it will play a significant role in helping the team, and the company overall, recover financially.

Walsh added: "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.

"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."

Only recently it was revealed McLaren was poised to mortgage its historic F1 cars, and its Technology Centre, in a bid to raise £275million to survive the current crisis.

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