Things are not looking good for McLaren it seems. With the COVID-19 essentially affecting vehicle production and sales, the Woking-based supercar maker will lay off about 1,200 employees.

In a recent report, the McLaren Group announced that it will cut almost a third of their workforce under a proposed restructuring program as the company deals with the fallout from the COVID-19 pandemic. The move is expected to affect not only the company’s technology, automotive, and racing businesses.

With the cancellation of motorsport events, suspension of manufacturing and retail activities, as well as the reduced demand for technologies and cars, it has hurt the company’s revenue generation.

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“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 have no other choice but to reduce the size of our workforce,” said Paul Walsh, Executive Chairman at McLaren Group.

Aside from laying off some of its workers, the McLaren Group has also put up its headquarters and historic vehicles in Woking, Surrey for collateral. The move, which was supposedly suggested by multinational investment bank JP Morgan Chase & Co., was done in order for the McLaren Group to form new bonds with funding secured from existing or new bondholders. The supercar maker is seeking to make up to GBP 275 million (about PhP 17 billion) with the collateral.

With the McLaren Group currently employing around 4,000 employees, the planned job cuts will represent almost a third of its employees being removed from the company. McLaren’s Formula One team, which employs around 800 people, is expected to remove 70 individuals should the restructuring plan be approved.