McLaren sheds a quarter of its workforce to stay alive

McLaren has announced it will slash 1200 jobs under a radical restructuring plan designed to save the British car-maker in the wake of the COVID-19 pandemic.

The redundancies will be across the McLaren Group, affecting not only the automotive division but its motorsport business too.

Issuing a statement to the markets, McLaren said that the cancellation of motorsport events, the suspension of manufacturing and retail operations, and lower demand for its technology solutions were all responsible for the dramatic decline in revenues that triggered the restructure.

“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 have no other choice but to reduce the size of our workforce,” said McLaren executive chairman Paul Walsh.

While the 1200 job losses represents more than a quarter of McLaren’s total workforce of 4000, its Formula 1 team's 800-plus headcount is expected to be reduced by around 70.

Helping ease the pressure on the McLaren F1 team is a $US145 million ($A218m) budget cap that will be introduced for teams in 2021, the year Australia's Daniel Ricciardo will join the team to partner Lando Norris.

Earlier this month, it was revealed that McLaren would slow the development of new models and was seeking to raise £275 million ($A510m) by mortgaging its Working HQ and collection of historic racing cars.