The McLaren Group, which owns the Formula 1 team and supercar maker, has announced plans to lay off 1,200 staff, or roughly 25% of its workforce.
The proposed cuts at the company are part of a restructuring plan that has been brought on by the ongoing impact of Covid-19, and the Formula 1 cost cap.
McLaren said it had been "severely" impacted by the pandemic, adding that the cancellation of motorsport events, the suspension of manufacturing and retail, and reduced demand for technology had all hit its revenue.
"We deeply regret the impact that this restructure will have on all our people but especially those whose jobs may be affected," said Paul Walsh, executive chairman of McLaren Group, in a statement.
"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 the workforce."
The redundancies will be made across McLaren's applied, automotive and racing businesses worldwide. Some support and back office roles will also be affected.
The news comes after Formula 1 revealed plans this month to introduce a new annual cost cap of $145 million for 2021, down from $175 million.
McLaren is the latest in a line of manufacturers to announce layoffs as a result of the coronavirus crisis. Last week, the U.K.'s Rolls Royce announced it was laying off 9,000 of its 52,000 workers to adapt to the much-smaller aviation market.
Disclosure: CNBC has a partnership with McLaren.