According to a BBC report, McLaren is planning to slash around a quarter of its workforce due to the Covid-19 pandemic that has battered its sales and advertising revenue.

The company currently employs about 4,000 people spread across its road car and Formula 1 divisions, of which 1,200 employees are said to face the axe, with the vast majority being those in the United Kingdom.

It’s a difficult situation for McLaren, as the current Formula 1 season has yet to begin and several races already cancelled. Additionally, demand for the company’s road cars have seen a significant decline due to the health crisis.

In a statement, the company said it had attempted to cut costs as much as it could and avoid layoffs. Prior to this, the company said it would furlough (grant a leave of absence) its staff and selected staff would take a pay cut as a stop-gap measure to cope. Consideration was also given to mortgage McLaren’s factory and historic car collection to raise funds to weather the pandemic.

“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,” said Paul Walsh, chairman of McLaren Group.

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