BEVERLY HILLS, April 03, (THEWILL) – The team principal of Formula One racing unit Mercedes AMG, Toto Wolff, and his Red Bull counterpart, Christian Horner, touched on the tough calls they have had to make to stay in line with changing F1 regulations.
They especially revealed their “pain” over the winter when large numbers of staff redundancies became necessary to align with the budget cap of F1.
The cap for 2021 is $145 million, with exceptions written in for expenditure on some line staff such as the race drivers and the top-three highest wage earners within the racing teams. There are further limits down the line as next season’s cap is $140 million, which will further drop to $135 million between the 2023-2025 seasons.
The budgets of F1 “big three”, Mercedes, Red Bull and Ferrari, which were in excess of this cap, had to be cut down to size to accommodate the requirement. They were left with little options but to adjust with staff redundancies. These tough decisions bore heavily on the team principals who had to sign the staff off.
According to Horner, Red Bull now operates on staff numbers “in the 800s,” which was not an easy number to reach but was the only way to get to the F1 cap. Explaining the impact of the action, Horner said “We’ve had to go through the pain of redundancies over the winter.
“We’ve had to re-size, re-package ourselves and it’s really tough when you’re saying goodbye to members of the team, some of which have been there for 25 years across its different formats.
“So it’s really been a tough exercise and continues to be a significant challenge, particularly for the bigger teams. It drives efficiency into the business because it quite simply has to. Head count is your biggest cost. Therefore, it has to be as efficient as you can possibly make it.”
The situation was similar for Mercedes as Principal Wolff confirmed experiencing the same circumstances. It was accompanied by his peculiar case where so much focus was placed on the question of the protracted contract negotiations with the team’s most expensive asset, Sir Lewis Hamilton, coming after Wolff’s own partnership deal with Mercedes and INEOS.
Therefore, when asked whether he experienced the pain Horner described, Wolff was direct: “Absolutely!”
Explaining further, he said, “You cannot secure your capability in terms of people if you suddenly have to operate under a drastic cost cap.
“We go through the same painful experiences with consultations in order to make the cost cap. To say the least, it is not trivial.”
About the Author
Jude Obafemi is a versatile senior Correspondent at THEWILL Newspapers, excelling in sourcing, researching, and delivering sports news stories for both print and digital publications.
