The economic impact of the global coronavirus pandemic isn’t even close to reaching its height, and the will almost surely outlast the disease itself. With thousands of jobs lost, businesses shuttered, and global decreases in purchasing power and consumer confidence, this is likely going to be the worst global economic disaster since the 1930s. Surely if anyone can weather this storm, it’ll be a supercar manufacturer whose billionaire clientele consists largely of robber barons and kleptocrats. Hmmm, maybe not.
Woking-based McLaren is looking to make 1200 of its staff “redundant” which is a polite British way of saying thrown out on their ass. This comes as part of the automotive manufacturer, technology developer, and racing team’s major restructuring plan. This accounts for more than one quarter of McLaren’s 4,000 person strong workforce. Is it possible to lose more than one in four workers and still maintain the same level of business?
With a suspension of manufacturing at the company’s factory and in-person retail all over the world, the company has not been generating revenue on the order necessary to employ its current workforce. Further, other companies have not needed McLaren’s technology solutions, and the racing team has been sitting idle since the first ten F1 Grands Prix have been postponed or cancelled thus far.
Fortunately for the Formula One team, only 70 such employees will be released from contract, according to the current plan. McLaren’s workforce includes over 800 people dedicated to the act of racing. While the departments making supercars and developing technology will lose over a third of its workforce, the F1 team will lose fewer than 10 percent. Interesting.
“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,” Executive Chairman Paul Walsh said in a statement. “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.”
McLaren has been a very vocal advocate for reduced budgets in Formula One in recent weeks, calling for an annual cap as low as $100M. F1 had already decided to reduce budget caps to $175M beginning in 2021, but in light of the coronavirus pandemic the teams ultimately agreed to reduce further down to $145M.
As a reminder of what kind of cars McLaren builds for its customers, you can currently order a one-million dollar Senna, a 1.7 million dollar Elva, or a two-million dollar Speedtail. The company’s bargain basement car, the 540C, is available for a paltry $200,000.