Formula One carmaker McLaren cuts 1,200 jobs amid Covid-19 crisis

McLaren Group, the Formula One team owner and maker of supercars, is cutting 1,200 jobs as it seeks to weather the impact of the coronavirus crisis on the automotive industry.

The cuts, which amount to more than a quarter of the Surrey-based company’s 4,000 workforce, were first reported by Sky News. The job losses will be spread across the company’s Formula One, road-car and applied technologies operations.

The company has already furloughed a significant number of its employees as the Formula One season and sales of supercars ground to a halt amidst the spread ofCovid-19.

The cuts come as the group seeks to raise £275m from investors, backed against the value of its classic car collection and its state-of-the-art Norman Foster-designed headquarters building.

McLaren has burned through £257m in the year to 20 April, with production at its Woking plant suspended since March.

The group’s existing shareholders pledged £300m of equity investment in March as McLaren sought to shore up its finances as the pandemic hammered its balance sheet.

McLaren is tentatively hoping for the restart of the Formula One season on 5 July with the British Grand Prix at Silverstone, after Boris Johnson gave the green light for it to proceed behind closed doors. The race series accounts for about 12% of the group’s revenues through prize money and advertising deals.

Japanese carmaker Nissan is also expected to announce job cuts in the coming days, with as many as 20,000 jobs globally at risk.