The coronavirus pandemic has put a halt to all planned races of the year. As at the time of this writing, no race has been held for this season, and there is no indication that any could be held anytime soon. This means that the teams are not making any money but are losing.
In a move to prevent further money loss, drivers of various teams have opted for pay cuts to allow their teams to save money. The first team to start this was McLaren after they forced some portion of their staff to take an enforced leave while the others who stayed would have their salary cut.
The drivers, Lando Norris and Carlos Sainz, volunteered to have their salary cut. Although McLaren did not reveal the number of people they sent on leave, they announced that the move was part of their plan to protect jobs “in the short term”. It would also allow them to save during this period. The plan would allow them to have all employees back when the economy recovers.
Team Williams stated on Monday that some of their staff would be going on enforced leave till the end of May. This is after their drivers, George Russel and Nicholas Lafiti have taken a 20% cut in their salary since the 1st of April, following the move by McLaren.
Members of senior management also followed suit. Racing Point made a similar move, forcing some staff on leave and the drivers asking for a slash in their salary.
All these are efforts to reduce the economic hardship the sport could suffer as a result of the pandemic. Teams are spending their reserves as no money is coming in at this time.
Maintaining a high number of workers, most of whom are doing nothing at this point is not economically sound at this moment. Slashing salaries and sending some workers on leave would allow these teams to save some money, no matter how small.
Already, teams are discussing if the proposed budget for 2021, at $175m, could be reduced to $150m or even lower. No one knows when the pandemic would end, and teams are trying all they can to make sure they recover quickly.
Written by: Leon Osamor