Supercar maker McLaren Group has announced that 1,200 jobs will be lost across its operations, representing around a quarter of its workforce.
The Surrey-based firm said in a statement that it has been “severely affected by the current pandemic”.
It went on: “The cancellation of motorsport events, the suspension of manufacturing and retail activities around the world and reduced demand for technology solutions have all led to a sudden impact on the group’s revenue-generating activities.”
McLaren said the new annual spending cap for Formula One teams also led to the job losses.
The group’s executive chairman Paul Walsh said: “We deeply regret the impact that this restructure will have on all our people, but especially those whose jobs may be affected.
“It is a course of action we have worked hard to avoid, having already undertaken dramatic cost-saving measures across all areas of the business.
“But we now have no other choice but to reduce the size of our workforce.
“This is undoubtedly a challenging time for our company, and particularly our people, but we plan to emerge as an efficient, sustainable business with a clear course for returning to growth.”
Shadow business secretary Ed Miliband said: “This is further devastating news for our manufacturing sector and incredibly worrying for the workers involved.
“The Government loans scheme for large companies is not working when a great British company like McLaren does not get access to finance.”
It was reported earlier this month that McLaren is seeking to borrow up to £275 million by mortgaging its Woking headquarters and historic car collection.
The job cuts were announced on the same day it was confirmed that Dr Andy Palmer is to leave his position as boss of Aston Martin amid a collapse in the luxury carmaker’s share price.
Meanwhile, there is speculation that Japanese car firm Nissan will cut 20,000 jobs from its worldwide workforce.
A 175 million US dollar (£142 million) cap on race car performance spending was set to be introduced for Formula One next year in a new rule designed to make the sport more competitive.
Talks have been held on reducing the figure in the wake of the Covid-19 pandemic.