McLaren to cut 1,200 jobs after supercar sales dry up

McLaren Group is to cut more than a quarter of its workforce as the company tries to raise new debt after sales of its supercars dried up in the Covid-19 crisis, according to a report.

The owner of the Formula 1 brand will tell employees about its plans to cut 1,200 jobs from its workforce of 4,000 on Tuesday, Sky News reported. The cuts will be across its F1, road car and applied technologies businesses.

An insider told Sky the cuts were going ahead to make the company "appropriately sized for the new reality."

The company is seeking to borrow up to £275m against the value of its classic car collection but existing bondholders have objected to the removal of their security over cars driven by Ayrton Senna and other famous competitors. The government has rejected McLaren's request for a £150m loan but talks are continuing, Sky reported.

The car industry was already suffering from depressed demand when it was hammered by the Covid-19 emergency. Aston Martin replaced its chief executive at the weekend after the luxury marque posted a loss of £119m for the first quarter in which the coronavirus added to its existing woes.

Paul Walsh, McLaren's executive chairman, told Sky current conditions were "undoubtedly a challenging time for our company, and particularly our people, but especially those whose jobs may be affected".

In addition to sales of supercars disappearing business has stalled at McLaren's road car division. Its F1 arm received a boost when the government exempted F1 personnel from quarantine restrictions to allow two Grands Prix at Silverstone in July.