Major staff cuts at Cosworth due to rules

The Northampton-based company, which supplies Williams and Toro Rosso with engines this year, is yet to sign a contract for 2007 with any of the Formula One teams, although it is most likely to supply Midland with engines.

However, following the decision by the sport's governing body to freeze engine development as of next season, Cosworth UK decided to make up to 150 employees redundant at the end of the 2006 season.

Autosport.com understands that the company's management will be notifying all employees in the next few days of the redundancy programme, inviting workers to be considered for voluntary redundancy.

The company's commercial director Bernard Ferguson confirmed the news, although he said the exact magnitude of the redundancy programme remains undetermined.

"We haven't finalised any numbers yet, but for sure we'll be reducing our workforce at the end of the race season," Ferguson told autosport.com.

"I think it's fair to say that it will be a significant percentage of our people, and it will be due to the change in the regulations.

"There's been a steady reduction in the demands for engines over the last two or three years. It used to be that an engine life was the span of a race, and now it has to run for two race weekends, so we need to produce fewer engines.

"The second impact comes now, as the development is more or less finished due to [the engine freeze] rules, and at least 50% of the engines that we produce are for development rather than to go racing.

"So the combined effect of those events means we have considerably less work to do than what we had in the past.

"That affects people at all levels - whether they're designing engines, or assembling. So unfortunately we got a fairly severe impact on our business."

Ferguson also predicted that the recession will hit other engine makers involved in Formula One, and not just Cosworth.

"I think that whilst this is happening at Cosworth right now, this will be happening with all of the engine manufacturers," he said.

"Perhaps we've anticipated it and are reacting to it earlier than anyone else, but I'm sure others will follow."

Cosworth was founded nearly five decades ago by Mike Costin and Keith Duckworth, and the company moved to its present location in Northampton in 1964.

The company exchanged hands over the years, most recently sold in 2004 by Ford to Champ Car shareholder and team owner, Kevin Kalkhoven.

Cosworth's division in the United States remains unaffected by the company's redundancy programme in the UK.