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- Ferrari is expected to make some massive personnel cuts to reduce its budget for the 2021 season.
- Business in Italy is currently limited in its ability to lay off employees during the COVID-19 pandemic.
- Ferrari, Red Bull and Mercedes are each believed to have spent more than $ 400 million on their Formula 1 program.
While the top-spending Formula 1 teams – namely Ferrari, Mercedes and Red Bull – prepare for staff cuts as F1 enters an era of budget constraints in 2021, Ferrari team chief Mattia Binotto hopes to ease the pandemic on the plan a little.
The F1 team has agreed a budget cap of $ 145 million for 2021. The limit is a light cap because many expenses do not count towards the limit, including driver marketing costs, driver salaries and the top-paid fees of three team personnel. However, the “Big Three” sports are believed to spend over $ 400 million annually on their program.
Ferrari, according to Forbes, spending nearly $ 570 million in Formula 1. Nearly $ 100 million of this is dedicated to staff, with the combined salaries of drivers Sebastian Vettel and Charles Leclerc accounting for nearly half that figure.
Binotto knows that layoffs and store reassignments are coming. He just hopes he doesn’t have to cut too many cuts during the pandemic.
Things are tricky for Italy-based Ferrari Italian Pandemic Decision, which only allows layoffs in the country during the COVID-19 pandemic if the company “permanently ceases operations through liquidation, declares bankruptcy without resuming operations temporarily, or enters into collective agreements with trade unions aimed at encouraging voluntary separation of employees”.
“Knowing the COVID situation, the fact that it is very difficult to lay off people, lay off people in that period,” Binotto said Friday in Bahrain. “Knowing that too in terms of messages, it would be very wrong, I think, to stop people when we are in a COVID pandemic situation, and I think the fact that the pandemic is not over and we still have now, let me say, is an emergency problem.”
Binotto hopes the FIA and Formula 1 will at least revisit budget ceilings in terms of personnel until the pandemic subsides.
“The mechanism needs to be reviewed, and in the end we should try to delay the mechanism, at the end of this year,” said Binotto. “I think, once again, as socially responsible, it will once again be very bad for business people during COVID, and knowing that we need to do it right away, we don’t believe it will be the right approach – so this is something I really want and I do. I want and will discuss it with the FIA to understand, and with other teams, is there any possibility to accommodate situations that are still emergency?
“That’s on the one hand. On the other hand, as you say, how we organize ourselves. Obviously we are trying to restructure our whole team. We have somehow … we are trying to relocate people in road cars because we are still a company. which is very big. These are some of the opportunities we have, but it is a tough exercise that we have started. The solution is not clear. ”
Will the $ 145 million budget limit help even the playing field in Formula 1? Let us know what you think in the comments section below.
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