F1 teams must cut spending as part of new budget caps

Painful’ Mc Laren redundancies aimed at fitting team to F1’s new future	
				Steven Tee  Motorsport Images

After teams agreed to a lower budget cap of $145 million in 2021 - dropping to $135m by 2023 - as well as aerodynamic testing restrictions to help make the sport more sustainable, McLaren confirmed it envisaged making around 70 redundancies in its F1 team even before the FIA World Motor Sport Council rubber-stamped the new rules.

Following an electronic vote of the World Motor Sport Council on Wednesday, the FIA has approved a reduced cost cap for F1 teams and a new sliding scale rule for aerodynamic testing, in order to further level the playing field between the front and back of the grid.

A further reduction has been made to the planned Formula One cost cap for 2021.

'F1 has been financially unsustainable for some time and inaction would have risked the future of its participants, who are to be commended for resolving this issue collectively and determinedly'.

FIA president Jean Todt thanked the teams and hailed "a major step forward for F1 and motorsport's sustainability".

Some top teams now spend more than US$200 million a year. Those layoffs come as part of much wider cutbacks of the McLaren Group as some 1200 jobs will be lost, but Seidl says the F1 changes are created to make the team the right size to be successful under the new regulations.

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Formula One teams must make significant cuts to their budgets in each of the next five seasons after the FIA announced new budget caps on Wednesday.

This season has yet to start due to the COVID-19 pandemic and when it does, likely in July, it is to be without spectators.

Team principal Andreas Seidl says the sport is facing some tough decisions in the future.

This season's cars will remain next year, with the new regulations coming in 2022, a year later than intended. McLaren, makers of race and super cars, has taken a massive financial hit in recent months and announced as many as 1,200 job cuts.

"Adjusting the method we function and right-sizing the group to this new cap over the following months is a substantial and uncomfortable task and, highlighted by our information previously today, will regretfully imply shedding staff member, however our objective is to be the best-sized and most effective group in the future". Keep comments relevant to the article.

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