The Daily Mail reports that over the last decade the number of staff at UK-based F1 teams has soared by 28.5 per cent.
However, with a proposed budget cap of $150m which would see only driver salaries exempted, along with marketing staff and those working on the design, development and manufacture of the engines, it is estimated that the seven British-based F1 teams alone would need to shed as many as 1,250 jobs.
While the average team spends around £171.8m a year, world champions Mercedes 2016 budget was £274.9m.
Due to the fact that a team’s success is measured by its on-track success as opposed to balancing it books, it comes as no surprise that in 2016 the UK-based teams made a combined net loss of £3.5m on a total revenue of £1.2bn.
One high-level source in the motor industry told the Daily Mail that the sport is preparing itself for some devastating cuts. “People could move jobs within the industry but may not want to go”, they added.
Meanwhile, a spokesman for McLaren said: “McLaren Racing is not only supportive of the proposed budget cap, but we believe it should be introduced as soon as possible in its entirety for the long term health of Formula 1.
“We are comfortable that we will be able to manage our existing resources within the final budget number proposed,” added the spokesman. “McLaren is a diverse organisation with a fast-growing Applied Technologies business and successful Automotive company.
“Add to that our involvement in other motorsport categories, and our ongoing consideration of new series, and we are confident that we can redeploy and refocus resources accordingly.”
According to an F1 spokesman, “the introduction will be phased to allow for adjustment, and due to an improved revenue distribution going hand in hand with the cost cap, smaller teams will be able to expand their organisations, making it more of redistribution of labour.
“Some teams will absorb surplus labour into their road car groups,” they added, “others are already involved in other motorsports, including Formula E.”
At Mercedes, Toto Wolff, who wants to see the budget cap phased in gradually, insists: “My utmost priority is protecting our structure and our people.
“It (should be) a process, not an event…,” he said of the cap, “It needs to go over several years, and it needs to consider the various structures that are being put in place.”
However, as we recently pointed out, Force India, which recently went into Administration, only to be rescued by a consortium led by Lawrence Stroll, was not only running on a budget significantly less than the proposed $150m cap, it had finished fourth in the standings for two-consecutive seasons. And still went under.