McLaren to axe quarter of workforce putting 1,200 jobs at risk amid coronavirus pandemic
MCLAREN plans to axe 1,200 jobs across its group amid the coronavirus pandemic.
The car manufacturer says a quarter of the company's workforce will likely be cut in the latest blow to the automotive industry.
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Affected roles will be spread across McLaren's Forumla 1, manufacturing and technologies operations, as well as impacting back office staff too.
The company, which says it's a major employer in the south east and Sheffield, currently has a workforce of about 4,000 people who have already taken wage cuts or been put on furlough due to the coronavirus crisis.
Redundancies will now be consulted on before a final decision is made.
The firm, which was set up by racing driver Bruce McLaren in 1963, blames the cuts on the cancellation of motorsport events, the suspension of manufacturing and sales activities, and a drop in demand for technology solutions.
Your rights if you're made redundant
IF you're being made redundant, you may be eligible for the below, according to GOV.UK.
- Redundancy pay: If you've been working for your current employer for at least two years, you're usually entitled to a statutory redundancy pay.
- A notice period: According to redundancy law, you’re entitled to a minimum notice period of 12 weeks’ if employed for 12 years or more, at least one week’s notice if you have been employed between one month and two years, or one week’s notice for each year if employed between two and 12 years. If your employer doesn’t want you to work your notice period they can offer you a lump sum instead.
- A consultation with your employer: Employers always have to consult with employees before dismissing them on the grounds of redundancy. In short, your employer must tell you what’s going on and give you a chance to ask questions and raise objections.
- The option to move into a different job: Your employer might offer you "suitable alternative employment" within your organisation or an associated company. Keep in mind that you may lose your right to statutory redundancy pay if you unreasonably turn it down.
- Time off to find a new job: If you’ve been continuously employed for two years, you could be given a reasonable amount of time off to look for another job or to arrange training to help you find another job.
Nissan and Toyota both closed their UK car manufacturing plants in March, while BMW, Honda, and Ford are among other top manufacturers that have suspended production as a result of coronavirus.
Meanwhile, F1 has been forced to cancel its first ten meets due to the coronavirus epidemic, and it's now hoping to restart races in June.
McLaren is also unhappy about a cap on the cost car manufacturers are allowed to spend on F1 vehicles that had been due to take force next year, although this has been postponed to 2022 because of the crisis.
It says in order to lower racing costs to under the cap it will have to cut the number of staff in this department.
Paul Walsh, executive chairman of McLaren, said: "We deeply regret the impact that this restructure will have on all our people, but especially those whose jobs may be affected.
"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 now have no other choice but to reduce the size of our workforce."
McLaren posted a revenue of £1.4billion in 2019, and a post-tax profit of £33million from sales of 4,765 vehicles, plus its F1 and technology arms.
But its job cuts comes as Chancellor Rishi Sunak this month warned of a "never-before-seen" recession.
He told MPs the government would not be able to save every job and there could be a long-term "scarring" of the British economy.
More on jobs
McLaren isn't the only car manufacturer to run into difficulties - just last week Rolls-Royce said it was to cut at least 9,000 jobs.
While last summer Ford said 3,100 roles were at risk over the next 18 months.
Nissan also cut 12,500 jobs globally in the summer of 2019.