Formula One furloughs staff, bosses take pay cuts

Formula One furloughs staff, bosses take pay cuts

FILE PHOTO: Formula One F1 - Australian Grand Prix
FILE PHOTO: Formula One F1 - Australian Grand Prix

LONDON: Formula One has put almost half its staff on furlough until the end of May due to the novel coronavirus with chairman Chase Carey and senior management also taking a pay cut, an F1 spokesman said on Tuesday (Apr 7).

Sources said those on furlough were mainly employees whose work was race weekend focused and who could not carry it out remotely. The company employs in excess of 500 people.

The Formula One season has yet to start, with the March 15 season-opener in Australia cancelled along with the Monaco showcase in May.

Six other races have been postponed and Liberty Media-owned Formula One hopes to start up some time in the European summer, conditions permitting, with a reduced schedule of 15-18 races.

The spokesman said the senior leadership team had voluntarily taken a 20per cent pay cut but would remain at work while Carey, an American, had taken a bigger reduction.

Formula One gains most of its revenue from race promotion fees, broadcast deals and advertising and sponsorship which have all been stalled by the virus with most sport at a standstill globally.

Three of the seven British-based teams - McLaren, Williams and Racing Point - have also furloughed staff in the past week to cut costs.

The teams are currently on a factory shutdown, with the August break brought forward to March and April to allow space for race rescheduling.

Under the British government's furlough scheme announced last month, employers can claim for 80per cent of employees' usual monthly wage costs, up to 2,500 pounds (US$3,068) per month.

Formula One teams have already agreed to delay until 2022 significant technical rule changes planned for 2021 and use the same cars next year to save money.

McLaren boss Zak Brown warned at the weekend that Formula One is in "a very fragile state" and risks losing some of its 10 teams unless some big changes are made.

Source: Reuters

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