McLaren Group to lay off quarter of its workforce
Image credit: Dreamstime
The British automotive engineering company has announced that it will cut 1,200 jobs across its operations, under severe financial pressure from the coronavirus pandemic.
Earlier this month, reports circulated suggesting that McLaren was hoping to borrow up to £275m by mortgaging its Woking headquarters and collection of historic cars.
The company said in a statement that it has been “severely” impacted by the coronavirus pandemic and the event cancellations and other restrictions associated with it: “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 1,200 jobs due to be cut represent around a quarter of its workforce of around 4,000 people. The company said that jobs are likely to be affected in its applied technology operations – developing electronics and software for other companies – as well as its automotive and racing businesses.
“We deeply regret the impact that this restructure will have on all our people, but especially those whose jobs may be affected,” said McLaren chair Paul Walsh. “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.”
“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 said that the new annual spending cap for F1 teams also contributed to the job losses; teams are to be restricted to $175m (£142m) of spending on racing car performance in a move to make the sport more competitive.
Shadow business secretary Ed Miliband commented: “This is further devastating news for our manufacturing sector and incredibly worrying for the workers involved.”
He added that the job losses at “a great British company like McLaren” suggest that the government loans scheme for large companies is not working effectively.
Meanwhile, recent reports have claimed that Japanese automaker Nissan is planning to cut over 20,000 jobs (approximately 15 per cent of its global workforce) in an effort to survive the coronavirus pandemic.
Last week, Rolls-Royce announced that it expects to cut at least 9,000 jobs from its global workforce amid the “unprecedented” pressures caused by Covid-19, which has almost completely put commercial flights on hold with an impact throughout the supply chain. Most job cuts are expected to be in the company’s civil aerospace business. Aerospace giant Airbus has warned that it is “bleeding cash at an unprecedented speed” which could threaten the existence of the company.
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