Major consequences for top teams: 'Between 80 and 100 employees downsized by 2021'

In June 2019, it was agreed that the budget cap that would apply from 2021 onwards in Formula 1 would be $175 million per season. Due to the coronavirus, this will in all likelihood now be further reduced to $145 million for a team. This means that Mercedes, Red Bull Racing and Ferrari will face some challenges.

It is well known that the three top teams have the highest expenditures and the most staff in Formula 1. They have to take a huge step back and this can have an impact on the number of employees that can remain in service. Furthermore, Mercedes together with Renault is arguing that the costs of engine development should also be included in the budget cap, something that could further constrain Ferrari. Liberty Media said in a letter to the teams last week that this possibility will be discussed "at a later date".

Considerably less budget for Red Bull, Mercedes and Ferrari

In any case, Ferrari is the team that most resists the lowering of the budget cap. Red Bull is said to have made a U-turn and would have resigned to a reduction of thirty million dollars. The same goes for Mercedes.

Nevertheless, these three teams will have to reorganize significantly next year. "Above all, that poses a practical problem. In Maranello 1500 people are currently working, but such numbers are no longer conceivable with the current reform. Ferrari, Mercedes and Red Bull can now spend between 380 and 450 million dollars every season thanks to GP revenues and sponsors, but they will be forced to make cuts", writes La Gazzetta dello Sport Sunday.

Reduce between 80 and 100 employees

The teams will have to deal with this blow by reducing the number of available hours and employees. "Less development of the car in the simulator and wind tunnel will be possible, but the hours on the test bench (for the engine, ed.) will also be reduced, despite the fact that engine development is not yet included in the current budget cap. In addition, the workforce will have to be reduced by about ten percent. For Maranello, Brackley and Milton Keynes that means between 80 and 100 people". The staff will not be fired, but will be used for other projects, according to the Italian newspaper.