Screeching brakes: McLaren cuts 1,200 jobs as coronavirus hits luxury car sales

The temporary closure of factories and showrooms, as well as the cancellation of motorsport events, abruptly cut off valuable revenue streams, McLaren said.The layoffs will impact the applied technologies, automotive and racing businesses, as well as support and back-office functions.
By : Bloomberg
| Updated on: 27 May 2020, 08:33 AM
McLaren's 789-horsepower Senna model named after the legendary Formula 1 driver. Image Credits: McLaren Automotive
McLaren's 789-horsepower Senna model named after the legendary Formula 1 driver. Image Credits: McLaren Automotive
McLaren's 789-horsepower Senna model named after the legendary Formula 1 driver. Image Credits: McLaren Automotive
McLaren's 789-horsepower Senna model named after the legendary Formula 1 driver. Image Credits: McLaren Automotive

McLaren Group Ltd. plans to cut about 1,200 jobs to help counter the financial impact of the coronavirus pandemic.

The layoffs will impact the applied technologies, automotive and racing businesses, as well as support and back-office functions, the British supercar maker said in a statement on Tuesday.

(Also Read: Supercar maker McLaren seeks $374 million in new funding)

The temporary closure of factories and showrooms, as well as the cancellation of motorsport events, abruptly cut off valuable revenue streams, McLaren said. Having already trimmed costs across the group, management is having to dig deeper for additional savings.

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“We now have no other choice but to reduce the size of our workforce," Chairman Paul Walsh said in the statement.

McLaren has struggled in recent months to raise cash after bondholders sought to block plans by the company to raise emergency funds by mortgaging its headquarters and historic-car collection, stating that the site and the classic cars are already pledged as collateral on $700 million of bonds sold in 2017.

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(Also Read: Fast and furious pile-up of debts threaten UK's luxury carmakers)

The company, controlled by sovereign wealth fund Bahrain Mumtalakat Holding Co., has had to halt production on account of the coronavirus pandemic, which has also delayed the Formula 1 racing series. Automakers from Daimler AG to Renault SA have cut or scrapped guidance in past weeks because of lockdowns tied to Covid-19.

First Published Date: 26 May 2020, 18:46 PM IST
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