Jean Todt has welcomed news that Ferrari and Mercedes are looking into expanding beyond Formula 1.

The FIA president said installing an even lower than originally planned budget cap for 2021 - $145 million per team - is the right thing to do.

"We had to be ambitious because with the costs of before, Formula 1 was unsustainable," the Frenchman told the Italian newspaper Corriere della Sera.

"The gap between the large, medium and small teams was too big."

But big-spending teams like Ferrari and Mercedes have warned that being forced to downsize and the prospect of sacking staff means they are looking into re-deploying personnel into other racing categories.

Ferrari is openly looking into Indycar, for instance.

When asked if this is the right step for Formula 1, Todt said: "I am always optimistic.

"What is the point of spending more than half a billion a year in one category? This is bad for the sport.

"As in all sectors of the economy, there will be a reduction in staff in Formula 1 and they will get the opportunity to work elsewhere," he added.

"When I was young, drivers like Jim Clark and Jochen Rindt raced in several series at the same time. It was a great era.

"I would be happy to see Ferrari, Mercedes and Red Bull fighting together with the factory teams at Le Mans," Todt said.