1,250 Formula One jobs at risk over new budget limit
FORMULA 1’s seven UK-based teams may be forced to slash up to 1,250 jobs when a stringent spending cap is imposed next year, motorsport sources have revealed.
Liberty Media, which bought the sport for £6.3billion in January last year, is imposing a £117.6million annual limit on each team. There is mounting speculation that the move will trigger job losses as the teams slash costs.
Motorsport heartland regions Northamptonshire and Oxfordshire – known in the industry as Motorsport Valley – are expected to be hardest hit. An investigation by The Mail on Sunday with the help of senior sources indicates the teams may have to cut almost a third of their total workforce of 3,951 staff.
The average F1 team spends £171.8million a year. Britain’s biggest spenders – current champions Mercedes spearheaded by Lewis Hamilton and Valtteri Bottas – had a £274.9million budget in 2016.
Teams justify their spending by race results as opposed to profits. UK-based teams made a combined net loss of £3.5million in 2016 on a total revenue of £1.2billion.
Many say the spending excesses of big teams make it impossible for smaller outfits to compete. Northamptonshire-based Force India had to be bailed out by a group of billionaires after crashing into administration in July.
Salaries are one of the biggest expenses and some of the largest teams employ 1,000 people. Driver salaries and marketing staff are exempt from the restriction as are employees working on the design, development and manufacture of the engines.
Over the past decade the number of staff at UK-based teams has soared by 28.5 per cent.
One high-level motor industry source said the industry is braced for potentially devastating cuts. He added: ‘People could move jobs within the industry but may not want to go.’
But McLaren said the cap was for the ‘long-term health of Formula 1.’ A spokesman said: ‘We are comfortable we will be able to manage our existing resources within the final budget number proposed.’