Sir Jim Ratcliffe has terminated Sir Alex Ferguson's ambassadorial contract with Manchester United, despite the pair's friendly relationship.

On Tuesday, it was revealed that the agreement, reportedly worth more than £2 million per year, has been cancelled as part of Ineos' cost-cutting measures, which have already resulted in 250 Manchester United employees losing their jobs. Ferguson, who won 38 trophies as the Red Devils’ manager, signed on as a global ambassador for the club shortly after retiring and has held the role for over a decade.

However, in a face-to-face meeting with Ratcliffe, 71, Ferguson, 82, was informed that his contract would be terminated at the end of the season. According to The Athletic, the 13-time Premier League champion harbours no ill feelings about the decision, and both parties reached a mutual understanding.

Given the long-standing cordial relationship between Ferguson and Ratcliffe, the Scot’s reaction comes as no surprise. When Ratcliffe was finalising his acquisition of a minority stake in Manchester United last year, Ferguson expressed "optimism" about the billionaire and the impact he might have on the club.

"I am still a director of the club, and I know Jim [Ratcliffe] well," Ferguson said at the time. "We’ll have to see what he does, but I’m optimistic."

Ferguson and Ratcliffe have been seen sitting together or near each other at several Manchester United matches over the past year. After sharing the director’s box during United’s 2-2 draw with Tottenham in January, Ratcliffe spoke highly of the legendary Scotsman.

"He was the first person I met when I went up there, which I think was the second week of January. I had a meeting scheduled from 9am to 10am at his house, but I didn’t leave until 1pm," Ratcliffe said. "He never stopped. He’s got a wealth of experience, countless stories to tell, and many thoughts about the club.

"I don’t think he has been encouraged to get too involved, but he remains deeply thoughtful about the club, and his experience is immense. He truly understands the values and traditions of the club and what it stands for. He’s still fiercely competitive, that’s Alex Ferguson."

Despite the amicable nature of his upcoming departure, it is understood that Ferguson has been saddened to witness so many former colleagues and friends lose their jobs as part of Ineos’ extensive job cuts.